Melbourne, Australia - The Australian economic outlook is a little brighter following the latest Commercial Property Index survey released by National Australia Bank. It showed that confidence in the Australian commercial property sector is at its highest level ever on the back of a boom in hotels and strong returns from city office towers. The index has risen five points to 21, its highest level since the survey began in early 2010.
The bank's chief economist, Alan Oster, said the surge in sentiment was due to big gains in CBD hotels and small gains in the office sector. He commented, "While we continue to see an uneven performance across sectors, the performance of CBD hotels has more than offset the lower sentiment that we're seeing in both retail and industrial markets.
Survey respondents have very strong expectations for growth in hotel occupancy, as well as capital gains and increases in revenue per available room, a standard industry metric.
In its others findings, the survey found office property is expected to provide the best income returns over the next one or two years, led by very strong growth in New South Wales. Retail and industrial rents are predicted to grow modestly in all states except Western Australia. Respondents expect vacancy in the office and industrial markets to fall over the next one to two years and rise in the retail sector.