Colliers International national research director Chris Dibble says the changes to the residential investment landscape will see alternative strategies explored by an increasing number of investors. He believes commercial property and syndication are likely to be beneficiaries because of the following factors.

• Commercial property sales are not subject to the bright-line test while depreciation can be claimed on the buildings themselves.

• The “buy-in” cost may not be too dissimilar to what some residential investors are already committing. Approximately 65% of all commercial and industrial assets nationally sell for $1 million or under.

• The industrial sector generally accounts for about 50% of all commercial sales by volume on an
annual basis. This is a sector viewed as a safe haven for investors given the strong tenant fundamentals and
stability in long-term returns.

• An alternative means of gaining exposure to the commercial property sector is syndicated property. It offers lower entry prices of between $10,000 and $50,000 for retail investors, relatively hands-off investments and potential additional tax benefits with PIE schemes.

A research report a year ago showed the total value of funds raised across syndicated properties in 2020 was just over $525 million, ahead of the previous high of about $485 million raised in 2018 and about $100 million more than the total recorded in 2019.

The total would have been higher had it not been for the Covid-19 pandemic which saw a number of
properties withdrawn. These included large scale tourism and retail property assets that would have raised just under $300 million.