Commercial properties deemed "set and forget" are in high demand across the state, including in regional areas.
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Ray White's head of commercial research Vanessa Rader said low interest rates were resulting in more buyers wanting to invest.
"With interest rates so low there is a growing number of private investors and often first-time commercial buyers in the marketplace looking to diversify from a traditional residential investment given the rapid increases in values we have seen in residential," she said.
"As such there has been strong yield compression across most property types however this is usually heavily linked to assets which are tenanted."
Ms Rader said smaller retail outlets were not attracting as much interest due to the uncertainty around lockdowns.
"For all regional areas, assets which are considered 'set and forget' are increasingly attractive, these may be childcare, fast food and service stations, stand-alone supermarkets as they have a long lease usually in place so gives the buyer certainty of income return over the medium term," Ms Rader said.
"Similarly, office assets which perhaps have a long-term tenant like a government department also have had an increased demand.
"Industrial in metropolitan areas has been the standout performer over the past two years thanks to the growth in online shopping and the need for warehousing, however this isn't as prevalent in regional locations as the major tenant type for these assets are usually local, small businesses which don't have the same level of security as a multinational distribution or logistic company in a metro area."
Ms Rader said there was a shortage of good quality commercial properties on the market, which was driving up prices.
"Assets of any type with a secure lease covenant are what is in greatest demand, however there is some hesitation for retail and office if not tenanted," she said.
A number of commercial properties are on the market in Warrnambool, including the Target Centre.
The most recent valuation of the site was $12.3 million.
The Glasshouse Plaza in Koroit Street, which comprises eight retail shops and an office, is also on the market.
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