The COVID-recovery is on, and is filtering through the commercial sector, according to NAB’s latest quarterly commercial property survey (Q4, 2020).
The NAB commercial property index lifted in the December quarter 2020, the second such rise in a row, but it is still weak (-35 points) and below average (0 points).
Ongoing travel restrictions impacted hotels (-64 points), although offices and retail improved. Industrial sentiment improved sharply, with warehousing and logistics leading the charge.
Confidence is growing in the sector, buoyed by continued positive economic news.
The latest unemployment figures for the country were announced by a smiling Treasurer Josh Frydenberg today, a fall to 6.4%.
Around the country, the commercial sector was in most strife in Victoria (-64 points underwater) whereas in Queensland and Western Australia it was in a relatively good place (-11 points).
The overall commercial rental vacancy rate was 9%, and unchanged, with a mixed outlook. Rents are expected to fall in most retail sectors, with the weakest areas being the eastern seaboard states.
Meanwhile, property developers are feeling a bit more positive, with 54% of them looking to start new works in the next six months. In the last period, only 39% were so inclined.
As expected, COVID has forced a change to the way we work.
In new research, the NAB survey found property professionals believe only 3 in 4 white collar workers will return to CBD offices post-COVID, and that firms will only require 80% of their existing CBD office footprint.
They also expect the configuration of offices of the future to be split 68% working space and 32% communal space.