Posted on Monday, July 30th, 2018 in by Matt Garmony
It is well publicised that the commercial, industrial and retail property market has declined in recent years following a downturn in the Western Australian economy. In these conditions, it is important to obtain expert valuation advice for Market Rent Reviews. The commercial office market has been the hardest hit, with significant reductions in rents and a surplus of offices available for lease, particularly in the fringe CBD and inner suburban locations of Perth. This surplus provides tenants with many opportunities and an ability to negotiate favourable lease terms for new space. Examples have included significant rental abatement’s of between 25%-50% for the term of the lease for commercial office space, which has a notable affect on the effective rental rates.
Industrial rents have also declined, particularly for smaller to medium premises as supply outstrips demand. Retail rents have also fallen, but probably not to the extent of commercial and industrial property markets, however as landlords fight to retain existing tenants or obtain new tenants for their vacant space, reasonable rental incentives are offered. It is important throughout the market rent review process that both sides obtain expert independent valuation advice in which an expert licensed valuer can source and interpret recent comparable rental transactions or rent reviews and prepare a rental valuation report to assist their client with the true ‘effective’ rental value of the Premise they occupy or are interested in negotiating a lease on.
For further information on how the licensed valuers at Garmony Property Consultants can assist you, please do not hesitate to contact us.