The Best Commercial Investment Opportunities for 2023

• In the commercial space, there are fewer properties available, thus increasing yields
• Best opportunities are currently in regional townships where there are large commercial businesses being established
• Melbourne CBD is also a surprising market that should be explored

By Helen Tarrant

Current investors are no doubt looking at the Australian property market and thinking, ‘what on earth is going on.’

Interest rates are surging, residential property is hitting its worst slump in years and commercial property yields are laughable in many cities where opportunities used to flourish.

For those who were lucky to secure some good commercial investment deals in the past few years, many now would be confused as to why those same strategies and opportunities aren’t as easily accessible as we enter into 2023.

In the commercial space, we are seeing fewer properties available with yields offering strong returns, as a result of a surge in demand. There is an overwhelming demand for commercial property, especially sub 1 million compared to supply.

The best opportunities at the moment are in regional townships where there are large commercial businesses being established to support the growing population. In addition, these regional businesses often have more cash coming in than going out, establishing a sustainable long-term growth opportunity for investors.

In my recently published book Cashed Up With Commercial Property, I explore the yields and returns available on a lot of these regional areas, with locations like Albury generating a 12.75% return on investment, with over $30k positive cashflow up for grabs each year from million dollar investments.

However, as positive cashflow suburbs generally have higher yields, this means investors are really on the hunt for where the best opportunities are…and having spent the last 12 months watching the market and preparing for this inevitability, here are some of my recommendations for the best places to find a commercial deal in Australia in 2023

The Best Commercial Investment Opportunities for 2023

NSW

• Wagga Wagga – 6.5-7%
• Albury – 6-6.5%
• Maitland – 7%
• Muswellbrook – 8%

QLD

• Inland Sunshine Coast – 6-6.5%
• Bundaberg- 7-7.5%
• Gympie – 7-7.5%

VIC

• Warrnambool – 7-8%
• Geelong- 5% plus
• Wadonga – 7% plus
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When it comes to the types of properties you should be on the lookout for, my recommendations would be the following:

• Retail shops in gentrifying areas – these will give you growth in a couple of years as well as enough cashflow to hold at the moment. If you purchase in a regional area, the yield should be around 7%.
• Office space in Melbourne’s CBD – while this might sound counterintuitive given the current reports on CBD yields and lack of office capacity, this is a great opportunity for investors. Because the confidence still hasn’t come back yet for the investors in Melbourne, it’s a fantastic time to get a 6% yielding property in Melbourne which will give you both stability and growth in the long term, because as we all know, CBD’s will always bounce back.
• Industrial properties in fringe suburbs – Industrial properties are so hot at the moment, it is hard to get anything close to 6%…however if you go large regional or fringe metro areas, you may get lucky at 6.5%

The commercial property landscape is continually changing, that’s why I always encourage investors to do their research, get quality education and find the right deal for them, rather than following a particular trend.