The Year Ahead for Commercial Property Investment

Posted on Friday, February 10 2012

As we move into 2012, the prevailing sentiment as far as the Commercial Property sector goes, is that we are starting to enter into recovery mode.

We have definitely reached the bottom of the Commercial Property Cycle and are starting to see signs of life again. The general level of enquiry for vacant space has picked up right across the board as Tenants realise that this is the perfect time to reposition themselves for the upswing when it comes – and it will.

There is nothing new in what has happened even over the last four years as far as the economy on the property market is concerned. I made this point to a newspaper recently when they asked my opinion on the amount of vacancies in the Tauranga CBD Commercial Real Estate.
My reply was that I could remember the situation being similar in the early 1990’s after the ’87 stock market crash and, again in the early 2000’s after the Asian Crisis.

It is only human to be caught up in the sentiment of the day, be it “irrational exuberance” or the current “funky blues” syndrome which the media and some commentators revel in.
The sad reality is that it is all only part of a natural cycle and those investors who have the vision and moral courage to see that will have been laying down the platform through acquisitions for future growth.
When the market eventually starts to heat up in years to come, those same players will be nowhere to be found. They will be off enjoying the fruits of their current purchases and will simply wait on the next bubble to burst before coming back into the market again.

Unfortunately, these brave counter- cyclical souls are the exception to the rule as it takes a steely determination to swim against the current and not be caught up in the madness of a booming market.
For the rest of us, the signs are pointing to a slow but steady recovery in the Commercial Real Estate market with the “madness” still some years away.
I hope you all have a happy and profitable year.

D.J. McMahon
Managing Director
McMahon Commercial

Commercial Real Estate | Commercial Property

 

 

 

 

 

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Expert's Bio

Denis McMahon

Brought to you by Property Managers Ltd: Pacific Property has been formed with the aim of building, over time, a diversified portfolio of Industrial, Retail and Commercial properties to provide strong sustainable returns to investors which will be managed by experienced property manager, Property Managers Limited (PML). The directors of Pacific Property Fund are Denis McMahon and Philip Tushingham, who together have over 45 years of experience in investing in, and managing commercial properties. “Pacific Property presents an opportunity for investors to invest in a brand new quality industrial building in Mount Maunganui and to join us as we build a quality commercial property portfolio diversified both geographically and across industrial, retail, and commercial assets.”

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