The industrial property market looks to be steadily emerging from the economic doldrums, with sales totaling almost $250 million in Melbourne alone.
According to the latest report by CB Richard Ellis, sales totalled $249.1 million in the Victorian capital, most of which occurred in the late second and third quarter.
Research analyst Craig Olde said the late sales proved momentum was building in the market, with owner occupiers and private investors the main buyers.
Defying predictions earlier in the year, few grade A yields had been above 9 per cent.
“More recently, industry opinion was that yields might once again be sharpening back towards 8 per cent, however our survey results are yet to reflect this,'' Mr Olde said.
Three consecutive quarterly surveys had shown an average grade A warehouse yield of about 8.88 per cent, in line with industry opinion.
The sales volumes, although a far cry from the peaks of $1.6 billion recorded in 2006, are still better than expected given the current state of the financial markets.