The market has been in a state of flux, with interest rates rising, inflation concerns lingering, and geopolitical tensions escalating. Donald Trump’s recent political return has added another layer of uncertainty, as his policies and statements often have ripple effects on both domestic and international markets. We’re seeing a trend of both property investors and businesses, unsure of what to expect from the political landscape, seek refuge in hard assets – including residential, commercial, and industrial properties, as they are less susceptible to the whims of political change or market sentiment.
In fact, property is valued for its ability to generate steady income and appreciate in value over time. However, we’re seeing a shift in investor sentiment as residential property yields have come under pressure due to rising interest rates, increasing costs and rental income not keeping up with the pace of expenses. As a result we’re seeing commercial and industrial properties proving to be favourable, particularly when coupled with long-term leases and reliable tenants. These assets offer security, consistency and stronger yield potential, making them an attractive alternative in the current economic climate.
If you’re concerned about the current market volatility, it’s essential to focus on investments that offer resilience, consistent returns, and act as a buffer against inflation. This is where industrial and commercial property stands out. They are physical, income generating assets that typically retain value and located in prime locations which remain in demand, regardless of market swings. Industrial and commercial property with long-term leases provide a steady, predictable income stream. Industrial property for example typically has strong resilience even when other markets face challenges. Since the growth of ecommerce during COVID-19, there has been a substantial increase in the demand for warehousing, and infrastructure, making these assets valuable.
Let’s take for example a recent industrial property investment acquisition for a client in Beenleigh, QLD. This asset features a very well-established building/construction tenant with a long-term lease of over 5 years, with fixed rental increases that keep pace with inflation, is located in a key industrial hub and consistent cash flow, which is unaffected by short-term market movements.
Even as we witness market shifts and uncertainty – this property continues to deliver stable returns, long-term security, and capital appreciation.
In the face of market volatility, investors should consider diversifying their portfolios – especially properties with strong tenants and long leases. As the market continues to fluctuate, these assets will continue to provide stability and security, making them an essential part of any property investment strategy.
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