Infographic: Industrial, office, and retail rent prices across Australia
There is no denying rent is among the best indicators of a commercial property’s value — far more so than a residential property market. Commercial real estate generally (but not always) delivers lower capital growth but higher rental yields, whereas housing does the reverse.
Other economic factors will also impact commercial values, but as the trajectory of rents over time directly reflects demand, they will provide you with one of the most accurate pictures of the market whether your aim is to buy, sell or lease.
The problem is, most information published on commercial rent is based solely on prime real estate. The small to medium-sized sectors are ignored in favour of the big end of town and its gleaming office towers. This means a large proportion of market participants are receiving a distorted view of rental asking prices — which then impacts on their ability to make the best decisions.