An effective ban on self-managed super funds borrowing to invest in residential property is causing a spike in interest in commercial properties across Perth – a shift that could spark a boom for developers.
Justin Mabarrack, head of end-to-end Burswood-based property agency Effective Property Solutions’ (EPS) Industrial/Commercial division, says the firm has been busy fielding extra enquiries from self-managed super funds (SMSF) in the wake of the change.
“The brakes appear to already be on for residential properties with SMSF trustees now keen to inject their capital into solely commercial and industrial properties,” he says.
“We were already seeing a sizeable shift before these changes, with more SMSF buyers snapping up properties such as strata warehouses to own and occupy due to their affordability and versatility.”
An opportunity for developers
EPS Founder and Managing Director Erwin Edlinger says while the shift presents challenges for the residential sector, which is plagued by undersupply in Perth, commercial and industrial property developers are poised to reap the rewards.
“The Federal Government’s move to restrict SMSF borrowing arrangements for residential property will likely slow the creation of new housing stock in Perth, but the redirection of funds to the commercial and industrial property sector does present significant opportunities for developers, especially in the strata space,” says Mr Edlinger.
“Given there’s a shortage of supply of the type of properties that suit these investors locally, we expect developers to step in quickly to create more commercial opportunities to meet this pent-up demand.”
Accelerating existing interest
National property developer CapPru’s recently completed Jandakot Business Park at 100 Prinsep Rd – the largest project of its kind in Perth within the past five years – underscores the surging investor interest in the space.
“EPS successfully sold through all 46 high-end strata warehouses at Jandakot Business Park for $42.143 million to 34 owner occupiers and 12 investors, fielding more than 1,500 enquiries along the way,” Mr Mabarrack says.
“This project highlights the growing demand for quality commercial projects of this nature in areas underpinned by strong growth forecasts and limited supply.”
EPS is now managing Jandakot Business Park.
