Investors continue to capitalise on the future rental growth and capital value of South Sydney’s real estate market – now regarded as one of the most coveted inner-city business hubs.

According to Nick Zenonos of real estate advisory and services firm CBRE, what makes South Sydney desirable is the strong demand from investors who want to grow their stakes within the area, coupled with limited stock supply. This pushed down the vacancy rate and drove rental growth.

“Sophisticated investors who already own property within South Sydney are realising how sought after the precinct is becoming and are looking to expand their portfolio as a result,” said Zenonos.

“The limited opportunities that are available are being snapped up in record time, with buyers acutely aware of the continued forecast growth within the area.”

Another catalyst is the low interest rate environment.

“In line with the official cash rate decreasing from 4.75% in October 2011 to 1.50% in August this year, South Sydney prime industrial warehouse yields have compressed by 153 basis points to 6.5%,” said James Melville from CBRE Research.

He also added that the strong demand comes from the area’s superior access to the airport, port, and CBD.