Opportunities in office market

What are some of the best ways to get a start in office realestate in this unloved sector at the moment especially with all the vacant space around? I imagine it is quite a good time to be in a position to buy at the moment?

 

The office market in CBD’s is an area I would avoid for some time yet. Some high level demographers are predicting a 5-10% long term reduction in the need for office space. When you think of that imagine one out of 10 office blocks now completely vacant.

I know it’s natural to think there may be an opportunity to get in while there isn’t much competition. However the long term changing in peoples work habits might damper growth for a long time.

Also- I have found prices haven’t even dropped. This is due to low stock levels and super low interest rates. So bargain are not even really there yet.

Having said all of that. I actually see value in some non CBD office space. For example offices in suburban areas and even offices in industrial areas seem to be going alright from a tenant point of view.

Scott O’Neill

 

It'll be very interesting to see what yield 76-78 Pitt Street, Sydney sells for. 10 year lease back to Telstra should attract some investors but it does come with its risks

Pretty much unleaseable after the 10 year period. It will need extensive repositioning or demo and rebuild. The current building maximises the allowable GFA though so you'd be essentially replacing what's already there which wouldn't be viable. The repositioning will be very expensive. Brand new facade and core. Similar cost to demo and rebuild

Chance to amalgamate neighbours but they're strata buildings and you'd be competing with Charter Hall who are the owners on the other side of the 2 smaller strata buildings. They wont let you have them easily

Very interesting sale

 

Too many double negatives for me @The Y-man

So the REITS/CPTs are contemplating fire sales? Or is it the ones that you don't own are contemplating doing so?