In today’s world, investors are facing challenges due to instability and low returns on more traditional options such as stocks and shares, bonds, and ISAs. Global events like war, disaster, and changes in economic relations means that investments can be smashed in seconds.
People in Australia are increasingly looking for other options and an emerging trend is commercial real estate investment. Instead of investing in rental properties, or the stock market, people are turning towards commercial opportunities which can provide substantial returns and stability. If you are looking for diversification in your investment portfolio in Australia, we take a look at the benefits that investment in commercial real estate Sydney offers below.
1. Economic Stability and Growth
Sydney generates in excess of $142 billion per year for the Australian economy and this amounts to over 6% of national GRP (Gross Regional Product). Sydney is a vital anchor for the Australian economy which means that commercial real estate represents a more stable investment opportunity.
2. Competitive Returns on Investment
When looking at your financial resolutions for 2024, one of the major factors is ROI and historically, commercial real estate is a strong performer. While ISAs and other savings streams can expect returns of 5% or less, on average, commercial real estate can make you more significant gains of 8% to 10% and this is just the global average. If you do your research and select your options carefully, an ROI in excess of 15% is not unrealistic.
3. Diversification Opportunities
Sydney also benefits from a diverse range of business opportunities and real estate properties. Major industries in Sydney include finance and insurance, professional services, science and research, and technical services. You could use this to your advantage to keep a diverse portfolio that includes business properties from different sectors depending on current trends and which industries are booming.
4. Strategic Location
Lastly, is there a more iconic city in Australia to invest in? Sydney is renowned worldwide and it is a major hub for tourism and business that rivals major locations like London, New York, and Tokyo. When people think of traveling to Australia, Sydney is typically the first location they think of and it’s packed with things to do. Not only that, but it has the highest GDP out of all the cities in the country and businesses investing in Australia will also consider Sydney as a prime location.
Sydney Continues to be a Hotspot for Commercial Investment
Investment in commercial real estate in Sydney has real potential. With consistent economic and GDP growth, businesses are investing in the city and wider area which means there is always an increased demand.
Couple that with the potential to diversify your portfolio by investing in different commercial industries, and the competitive ROI and you have a solid long term option that can offset more sluggish low-return options like ISAs and bonds.
Sydney also remains an incredibly popular and important destination in Australia both for tourism and as a major business hub which means that the government will continue to invest in the city and effectively protect your commercial endeavors.
