Softening buyer demand reads as bad news. For anyone buying, it is the opposite. Fewer bidders means less competition, more time to do the work properly, and terms nobody would have entertained eighteen months ago. The best acquisitions I have been involved in were made when most people had stepped back, and that is the market we are in now.
Off market
Several off market opportunities have been presented to me this month.
Two-title industrial holding, income circa $830,000 net, circa $12m to $14m. Around 1.2 hectares, four buildings, with approved development land included. Private sale.
New build investment, national branded tenant, circa $2.4m at 6.25 per cent net. Ten year lease plus options, completing 2027.
Small multi-tenanted industrial, low $1m’s. Long held by the one owner.
Industrial premises advertised for lease, where the owner would consider a sale.
Tenanted industrial investment, which we now have under contract.
If any of these are close to what you are after, reply and I will send you the detail. If none of them are, tell me what you are looking for and I will keep it in mind as things come to me.
The number
Last month I wrote about the land tax revaluations that were coming. This month we started to see those assessments actually landing.
A number of examples of revaluations came across my desk from properties we manage, and read together they show something most owners are not looking at.
Two Brisbane holdings, where the land value did not move at all. Brisbane was not in the March round, so the Valuer-General left those values where they were.
One property in a council that was revalued, up 8 per cent.
One property in a council that was revalued, up 41 per cent.
What catches people is not this year's bill. It is the two that follow it.
Land tax is not calculated on this year's land value. It is calculated on the average of the last three years, or on this year's value, whichever is lower. A revaluation does not land on you all at once. It arrives over three years, in thirds.
Take the property that rose 41 per cent. It pays roughly $4,900 this year. On exactly the same valuation, with no further increase whatsoever, it pays about $6,000 next year and about $7,100 the year after that. Up 47 per cent over two years, off a revaluation that has already happened.
All four are in the same position to different degrees. The increases are locked in, and nothing between now and then changes them.
If you hold in Brisbane and felt you dodged it this year, you did, for now. When Brisbane is next revalued the same mechanism applies, so the increase arrives in instalments rather than one hit. Worth knowing before you set an outgoings budget off this year's number.
Aggregation is the rule almost nobody has read, and it decides the bill more than any individual property does. The same $2 million of land costs an individual $21,000 and a trustee $29,500. Buying with a partner does not create a new threshold. Each trust gets its own, until two of them look the same. About a nine minute read.
On market
A significant number of properties are hanging around on market. Plenty are still selling, and good assets priced sensibly are finding buyers, but not all of them, and not at the speed they were a year ago. Expressions of interest campaigns are closing without a result and the listing stays up, sometimes reappearing as a private treaty with a guide where none was given before.
Two things are causing it, and they pull in opposite directions.
Buyers have gone quiet. The Reserve Bank put through three cash rate rises earlier this year and has held at 4.35 per cent since June. Trimmed mean inflation is 3.6 per cent and forecast to stay above 3 per cent until mid 2027. Nobody is underwriting a purchase today on the assumption that debt gets cheaper soon.
Sellers have not moved. Their expectations were set in a market that ran hard for several years, and nothing has happened yet to reset them.
The second half is the interesting one, because it sustains itself. Seller expectations do not reset on sentiment, or news, or an agent's advice. They reset on comparable sales, and a slower market produces fewer of those. Thinner evidence means the vendor holding out has less to argue against, and the campaign runs longer. What breaks it is a vendor with a real deadline accepting a number, because that sale becomes the evidence every other vendor has to deal with.
Until more of those land, the practical read is this. A listing that has been sitting for months is usually not a bad asset, it is a mispriced one, and the vendor is months further into the cost of being wrong. Most buyers treat time on market as a warning. It is closer to a shopping list, because it separates the vendors whose expectations have had time to move from the ones who listed last week and are still enjoying the campaign.
It is the failed owner occupier contract I wrote about last month, seen from the other side. A vendor anchored to a number is the obstacle, wherever the number came from.
One last thing on listings. A leasing campaign is a signal that an owner is making a decision about an asset, and that decision is not always settled. An owner weighing a new tenant is often weighing whether to hold at all. Asking the question costs a phone call. Most buyers never make it, because they filter for sale listings and never look at the leasing ones.
From the portfolio
The good news first. In the months after the budget changes were announced, leasing enquiry across our portfolio fell away badly, and it was not only us. Agents we deal with were reporting the same thing, so it was the market, not our stock.
In the last few weeks it has turned. We have seven new leases either just completed or in advanced stages of formalisation. The shift I can feel is from businesses sitting on their hands to businesses making decisions, and it is the first clear movement in that direction this year.
The other half of that work is less visible, because it involves tenants who are already in the building.
Occupancy is the number owners watch. It is not the number that sets the value.
A centre we took over at the start of the year was 93 per cent occupied at handover and looked healthy on that basis. Three of its nine tenancies were sitting month to month. One had been month to month since 2014.
A valuer would look at this and discount any income that can walk on a month's notice, and a bank does the same through the weighted average lease expiry. Same rent roll, two different numbers, and the gap is not small.
Nine months on, the occupancy figure has barely moved, because occupancy was never the problem. The least secure tenancy in the centre is now the longest, on a five year term with ten years of options and fixed 4 per cent reviews. Two others are documented into real leases with real terms, and one option was exercised with a 4 per cent increase.
None of that shows up in a headline occupancy figure. All of it shows up in the valuation.
If you hold something with holdover or month to month tenancies in it, fix that before you next need a valuation, a refinance or a sale, not after. It usually costs a documentation fee and a conversation. Leaving it costs a discount nobody ever itemises for you.
What I am watching
The Retail Shop Leases Act review. Submissions closed 11 September. The recommendations are the thing to watch, particularly on scope. The definitions of retail shop lease and retail business are on the table, and if they move, tenancies shift in or out of the Act, taking the disclosure, outgoings estimate and audited statement obligations with them.
March 2027. The next annual statutory valuations issue in March, and Brisbane City was not in the March 2026 round. If you hold in Brisbane, open that notice the day it arrives rather than filing it. The objection window is 60 days from issue, and it closes months before the land tax assessment that depends on it turns up.
More next month.
Antony
Altiera manages commercial property and buys on behalf of private investors across South East Queensland. altiera.com.au
Nothing here is legal, tax or financial advice. It is what I am seeing on the ground. Check your own position with your accountant or solicitor.