The commercial property market looks to be on the path to recovery, with shopping centre values stabilising in the last six months.
According to figures from Colonial First State (CFS) Retail Property Trust the value of the trust’s shopping centres only fell by one per cent, or $75.1 million, for the period to December.
Michael Gorman, CFS fund manager said “The limited magnitude of the valuation loss reflects the resilient characteristics of our portfolio and the value added by the $500 million in key redevelopment projects that have been completed over the six-month period.”
Such projects include Sydney’s refurbished Chatswood Chase, a project that cost $185 million, and Melbourne’s $2.9 billion Chadstone shopping centre.
"Over the past six months confidence has returned to the investment and capital markets, which is translating into increased transactional activity. This, in turn, is providing independent valuers with greater evidence as to property values, and capitalisation rates appear to be stabilising,” Mr Gorman said.