Demand is likely to remain strong in 2022. Sydney investment, occupier and leasing markets recorded higher levels of transaction volumes in 2021 in contrast to investors being somewhat risk averse in 2020.
This was evidenced in research completed by Bawdens, the result of which can be seen below. Transaction activity increased markedly as we came out of lockdown in the October to December quarter of 2021 as compared to the same period in 2020. The number of transactions completed increased by 26% quarter on quarter.
Despite COVID 19, confidence and consumer sentiment are recovering further in 2022, stimulating and maintaining demand for industrial property this year.
Investors are preparing for higher interest rates. Despite investment yields which fell in 2021 to below 4.5% for prime investments, we believe that core opportunities will remain fair value despite the probability of lifting rates in 2022. This will limit or negate any likelihood of yields rising. We are seeing sustainable demand, from small medium enterprises also seeking established infill locations where an increasing number of business models are demanding instant delivery of products to online customers.
In 2019 of total retail sales approximately 9% were online. By September 2021, these exceeding 14%. With online penetration in the SME user market also increasing, users are increasingly willing to accept smaller buildings to be closer to customers. We expect this theme to continue development in 2022.