Media release - 13 July, 2012

Strong case for Sydney businesses to buy, rather than rent premises

Lower interest rates and upward rental pressures make buying a strong option for the commercial owner occupier market
Properties up to $20 million offered with vacant possession or short term leases are providing opportunities for owner occupiers to purchase while prices are down compared to four or five years ago
1 Wonderland Drive, Eastern Creek is being offered with vacant possession

Lower interest rates and rising rents have prompted leading commercial property firm, Raine & Horne Commercial Homebush, to urge western Sydney owner occupiers to buy rather than lease their next commercial property.

“While leasing industrial premises has plenty of merit for many businesses, conditions are ripe for those considering purchasing industrial space in Sydney’s west,” says Thomas Muller, co-Principal of Raine & Horne Commercial Homebush.

“With interest rates sitting at below average levels and the Sydney market feeling the pinch of upward pressures on rents, a commercial mortgage would cost a business around the same amount of money as a leasing arrangement.

“By purchasing an industrial or commercial property, the building becomes a financial asset that you can build equity on and borrow against.

“In addition, industrial property ownership can potentially increase the value of your business down the track,” explains Mr Muller.

While there have been recent industry reports that the industrial property market above $20 million is bouncing back, Mr Muller confirms the market below $20 million in western Sydney commercial hubs such as Eastern Creek, continue to offer excellent opportunities for astute owner-occupiers.

“It's possible to secure a block of land in Eastern Creek for $320 per square metre, which is down from the region’s highs of $500psm once achieved,” says Mr Muller, who confirms rents have increased by around $5 per square metre in the last 12 months.

“Purchase prices on buildings are lower due to the current trend for building owners to try and maximise sale prices by offering leased properties to investors.

“This practice has kept sale prices down due to demand/supply forces and the reliance on yields.”

Likewise, industrial vacancy rates in the region are low for good quality warehouses in excess of 5,000sqm, which Mr Muller says is keeping upward pressure on rents.

“This is especially the case on existing buildings, and as a consequence, an owner-occupied industrial property is becoming a more viable transaction for a business with growth plans.”

As an example, Raine & Horne Commercial Homebush is seeking ‘Expressions of Interest’ for 1 Wonderland Drive, Eastern Creek (opposite LG Electronics and overlooking the M7 Motorway), which Mr Muller considers to be a perfect opportunity for owner-occupiers looking to acquire a well priced, never to be replaced industrial asset.

Built in 2006 and situated on the doorstep to the "Lighthorse Interchange" (M4/M7 Intersection), 1 Wonderland Drive, Eastern Creek offers immediate access to all areas of Sydney in every direction.

“The property is a 9,500 square metre warehouse complete with loading docks and on-grade roller shutter doors, ESFR sprinklers and internal warehouse clearances from 9.5m-11m,” says Mr Muller.

In addition, the property comes with mostly undercover parking for approximately 68 cars and has separate truck access.

“The offices are immaculately presented and offer a combination of open plan glass partitioning,” describes Mr Muller.

“The owners decided to offer this property with vacant possession given the potential for those commercial owner occupiers looking to grow their business in Eastern Creek, one of Sydney’s fastest growing industrial areas.

“Raine & Horne Commercial Homebush is excited by the prospect of taking this all encompassing opportunity into a largely untested market.”

Interest parties should submit an ‘Expression of Interest’ by 24 July, 2012 to Thomas Muller, Raine & Horne Commercial Homebush at tmuller@rhc.com.au, or by contacting Mr Muller directly on (02) 9739 9788 or 0409 469 628.

-ENDS-

For further media information contact:

Thomas Muller, Co-Principal Raine & Horne Commercial Homebush on 0409 469 628

Andrew Harrington, National Marketing & Communications Co-ordinator on 02 9258 5400

Industry leader encourages owner occupiers to buy commercial property