Lodge Commercial Real Estate Hamilton

Commercial real estate throughout the city took a ‘wait and see’ approach prior to the election. In the business world, nervousness in the financial markets was coupled with pre-election jitters. The fact that a Government could be formed so quickly following the election result has sparked renewed confidence in the commercial sector, but only to a certain degree. The sector remains cautious, given the global climate. Some see the present situation as bordering on the paradoxical: Many entrepreneurial investors are sensing opportunities but lack access to funds as banks go gun-shy and tighten their belts. Most of those who are sitting on cash are overly conservative, and are happy to remain on the sideline. We sense this will not be the case for long. As deposit rates drop to around 4% and inflation rages away at around 5% the value of cash deteriorates daily. Current yields are moving upwards of 8% and this presents a strong case to move money into commercial investment. Buyers have set the new rate but it is taking vendors a little longer to acknowledge that the sub 8% prices they were getting are no longer on offer.

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