Real estate to benefit from technology change!

At the Raine & Horne Commercial Insights seminar at the Westin Sydney last week Nerida Conibee Chief economist at REA predicted that in a world of technological change industrial real estate would be the big winner.

Alan Tonks of Raine & Horne Commercial Newcastle who attended said “while the retail industry is observing with great interest how their businesses will be affected by the arrival of Amazon many of the technology distributors require industrial real estate for warehousing needs.”

Amazon will soon open their first Dandenong South fulfilment centre which comprises 24,000m2 & brings hundreds of jobs to the region.

Other technologies for example driverless vehicles need to be stored somewhere. As Nerida commented “ all of those vehicles won’t be roaming the streets at night”.

Alan Tonks continued “ the speakers were generally upbeat about the real estate investment and in particular industrial real estate investment. With interest rates forecast to remain low for at least 12 months, cash in the bank shows a poor return compared to real estate investment”. “ A recent sale at McIntosh Drive Mayfield West with a fresh 5 year lease shows the purchaser a net return of 6.3% for the $430,000 outlay. It’s the best both worlds” said Mr Tonks. “ A return for greater than the cash rate with an asset future –proofed against changes in technology!”

Post by Alan Tonks – Commercial/Industrial Specialist

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