_WA’s border reopening to strengthen the state’s commercial property market

The reopening of Western Australia’s border this week will have a positive impact on the state’s commercial property market, according to Knight Frank.

Craig Dawson, Knight Frank’s Head of WA, said there was positivity surrounding the pending removal of borders on Thursday, with activity in the commercial market set to significantly strengthen.

“We expect more vendors to list their properties as it is anticipated there will be a bigger buyer pool with more people able to come into Perth,” he said.

“Last year we saw some higher-value CBD office buildings go to market but fail to sell because interstate and overseas investors were locked out of the state.

“The buyers for these types of assets would typically have come from either eastern Australia or South East Asia, and because neither of these could get into Perth the buyer pool was considerably reduced.

“Property owners are now buoyed by the fact that borders will reopen on Thursday, and indeed we are seeing renewed confidence across the state’s whole commercial property market.”

Craig said investor interest in WA was supported by strong economic fundamentals.

“We expect there will be an influx of investors coming to look at properties in WA, not only because they physically can now, but because of the economic strength of our state,” he said.

“We have a strong and stable economy, with the mining sector continuing to perform well and a gradual decline in Perth’s office vacancy rate.

“While Sydney has a similar story to tell in terms of a rise in activity following the end of lockdowns and borders reopening, many investors will choose Perth over the eastern states.

“This is due to our economic fundamentals as well as the affordability factor, with the yield spread remaining attractive compared to East Coast markets, with the backdrop of interest rates weighing on investors.”

While COVID-19 was now starting to spread throughout WA, Mr Dawson said it was expected cases would peak at the end of March, and based on the experience of other states around Australia, the state would be back to a new normal in a fairly short space of time.

“We haven’t seen the full effect of COVID yet but arguably WA is more prepared than any other state was, with high vaccination rates, and there is a sense that we are getting on with it,” he said.