Issue 133 of Industrial Property News (see page 5 this issue) revealed that a recovery in business confidence from SMEs post Covid 19 commenced during the last quarter of 2020.
Whilst GDP is anticipated to have contracted in excess of 4% in 2020 a significant turnaround in economic growth to over 2.5% is expected this year. eCommerce growth can also be seen to have contributed to the turnaround in SME confidence in late 2020 with online retail sales growing over 70% during 2020.
Further supporting the industrial market is that online retail is also expected to increase market share from strip retail shops as consumers accept more online platforms.
For Industrial property this will translate into increasing warehouse space demand as the year progresses.
This demand will support moderate rental growth in 2021 and consolidate the gains in capital values that were delivered in 2020.
We expect investors will continue to seek secure cash flows from sound SME tenants across New South Wales with Sydney continuing to be the preferred location in 2021.
Industrial property proved to be a resilient property sector through 2020, with our Asset Management service now extending to almost 600,000m2 across Sydney, during Covid 19 we observed our current and deferred tenant rental collections from industrial assets exceeded 90% since Covid first emerged a year ago.
In the year ahead we are already observing stable vacancy rates with leasing demand showing continued strength for the year to date.
In conclusion, a year of continuing consolidation and market stability is anticipated.