2025 Predictions: What do they mean for investors and commercial property finance.

As we approach 2025, we thought it worthwhile to share data from a Knight Frank report titled Australian Horizon 2025, authored by Ben Burston, where they have outlined key predictions for the 2025 commercial property market that team CapStack believe property investors, developers, and SME business owners should consider.

Key predictions include:

1. Market Recovery on the Horizon:

Core assets have largely repriced and are set to begin recovering in 2025, with Sydney's industrial and CBD office sectors leading the way.

2. Interest Rates to Influence Recovery Strength:

The Reserve Bank of Australia's future interest rate decisions (whether they remain neutral, increase or decrease) will play a crucial role in the market's rebound.

3. Investors Ready to Re-enter the Market:

After a period of adjustment, investors are prepared to pursue new opportunities, increasing activity across all asset classes.

4. Office Vacancy Rates and Supply Dynamics:

High vacancy rates may mask an impending shortage of new office developments, potentially impacting future availability.

5. Industrial Rent Divergence Expected:

Variations in supply levels across regions may lead to differing rental performance in the industrial sector.

6. Retail Sector Poised for Revival:

Improved asset performance and rising real incomes are driving renewed investor interest in retail properties.

7. Build-to-Rent Sector's Growth Potential:

The success of the Build-to-Rent market will depend on policy developments and community acceptance.

Partnering with a commercial finance broker can provide tailored insights and access to financing solutions, ensuring you capitalize on these emerging opportunities as part of your ongoing property strategy.

As we head into 2025, the commercial property market presents both opportunities and challenges, making it more critical than ever to have the right financial strategy in place. Working with an experienced  commercial broker can be the key to navigating this evolving landscape successfully. 

CapStack provides in-depth market knowledge and strong lender relationships, enabling us to source and structure optimal finance solutions tailored to your unique needs. Whether you're a property investor, developer, or SME business owner, their expertise ensures you stay agile and well-positioned to seize emerging opportunities while mitigating risks. 

Partnering with a broker isn't just about securing funding—it's about building a strategic advantage that sets you up for long-term success in a competitive market. Let's talk.

Are you a commercial property investor?

To capitalise on the retail sector's current resilience and growth trends, commercial property investors should:

1. Focus on Metropolitan Areas:

Invest in retail assets within thriving metro areas, where occupancy and rental returns are stronger.

2. Diversify with Secondary Properties:

Target secondary retail assets for potentially higher income returns than prime locations.

3. Anchor Tenants Strategy:

Prioritize centers with essential anchors like supermarkets and service-based tenants to ensure steady foot traffic and spending.

4. Monitor New Supply:

Leverage areas with limited new development to maximise rental growth.

5. Adapt to Consumer Shifts:

Stay aware of demographic and technological trends impacting retail consumption and adjust portfolios accordingly.

Looking to invest in the retail markets? Reach out to the CapStack. 

A CapStack commercial mortgage advisor can be instrumental in helping you navigate investments into these sectors. By leveraging our deep market knowledge the team at CapStack can source optimal financing options tailored to specific sectors like the office, industrial, and living markets. 

Whether it's securing and structuring optimised terms, or providing strategic insights into market trends, a CapStack advisor can help ensure that investors are well-positioned to capitalise on opportunities in Australia’s dynamic commercial property landscape. 

Let’s talk.

How can CapStack help?

An experienced business finance broker such as those at CapStack can help companies in the manufacturing, wholesale trade, and distribution sectors achieve their goals in 2024:

1. Securing Growth Capital: A business finance broker can help companies secure the necessary capital to invest in technology, equipment, and other resources needed to increase production and meet growing demand. This includes facilitating access to loans, lines of credit, and other financing options tailored to the specific needs of the business.

2. Optimising Cash Flow: Brokers can assist businesses in managing cash flow more effectively by arranging financing solutions like invoice factoring or supply chain financing. These solutions can provide immediate liquidity, allowing companies to manage operational expenses and invest in growth opportunities without cash flow constraints.

3. Navigating Cost Challenges: With rising costs due to energy prices, inflation, and interest rates, a finance broker can help businesses find cost-effective financing solutions. This includes refinancing existing debt at lower interest rates or securing funding with favourable terms that mitigate the impact of these cost pressures.

4. Facilitating Technology and AI Investments: To enhance productivity and competitiveness, businesses need to invest in advanced technologies such as AI and machine learning. A finance broker can identify and arrange funding options that support these strategic investments, ensuring that businesses can implement the latest innovations to improve efficiency and supply chain management.

5. Supporting Sustainability Initiatives: Many businesses are advancing their sustainability efforts, such as adopting renewable energy. A finance broker can provide access to green financing options, including loans and grants specifically designed for sustainability projects. This can help companies reduce their environmental impact while potentially lowering operational costs in the long term.

6. Financing Commercial Property Purchases: For businesses looking to expand their operations or establish new facilities, a finance broker can assist in securing commercial property loans. These brokers can navigate the complex landscape of commercial real estate financing, helping businesses acquire the necessary properties to support their growth and operational needs.

By leveraging the expertise and resources of a business finance broker, companies in the manufacturing, wholesale trade, and distribution sectors can effectively address financial challenges, capitalise on growth opportunities, and achieve their strategic goals in 2024 and beyond.

Looking to expand your property footprint as a business owner, property investor or owner-occupier?

Let's talk. The CapStack Team is ready for you.

Planning a business expansion or acquisition or property acquisition? Let's talk commercial finance. CapStack is ready for you.

For more expert insights and news on commercial property finance, borrowing as part of an investment strategy, business acquisitions and entrepreneurial strategies, subscribe to the CapStack blog or join the conversation with us on LinkedIn.

Why CapStack?

When it comes to securing the right financing for your business or commercial property acquisitions and projects in Australia, CapStack is the partner you can trust. With unparalleled expertise, a vast network of lenders, personalised service, and data-backed insights, we are committed to your success. Get in touch with CapStack today and unlock the full potential of your commercial ventures with our expert property finance services.

CapStack can assist with bank, non-bank, or private financing. Start here to connect with us and send through some basic information to get the ball rolling or email us directly. Our lenders are Australia-wide and ready to fund investments acquisitions and development projects. CapStack help's developers and investors fill their capital stack by providing access to the capital puzzle piece they are missing. CapStack works directly with developers and investors who need access to capital markets.