Which Commercial Property Sector?

[JIT]

Hi,

Trying to compare the 3 sectors - office, retail, industrial - in general terms:

- Which has higher yields?
- Which has higher capital growth?
- Which has the highest risk?
- Which has the lowest risk?
- Which is more volatile?
- Which has the highest entry price?
- Which one is easiest to understand?
- Which one would be more suitable for a beginning direct CP investor?
- Which one has higher leverage potential?

Also,

- Do different states have diffferent sectors which tend to do better, or make better investments?

Any thoughts?

GSJ

 

[bundy1964]

- Which has higher yields?

Industrial.

- Which has higher capital growth?

Well located retail/office.

- Which has the highest risk?

Industrial.

- Which has the lowest risk?

Well located retail/office.

- Which is more volatile?

Industrial.

- Which has the highest entry price?

Retail based on cost per sqm.

- Which one is easiest to understand?

Office.

- Which one would be more suitable for a beginning direct CP investor?

Office is where I started.

- Which one has higher leverage potential?

Retail if you can get good cg, lvr doesn't change much on property type lenders do vary a lot though.

- Do different states have diffferent sectors which tend to do better, or make better investments?

Each state would have it's own market factors much like residential does change for location.

Adelaide is currently a market for sellers with yields pushed down by people crossing over with a residential negative gearing background pushing prices up. Under those conditions I am holding and looking elsewhere to invest borrowed money to make a profit.

 

[JIT]

Thanks bundy1964,

From your comments, I like the sounds of well located retail/office space.

If I had to pick out of the two right now, I would go for office to start direct CP investment, as you had, due to the risk/yield/CG profile/entry prices and simpler understanding.

Will see if there are any more replies...

I have a feeling I may be changing my mind about this a few times...

GSJ