Dennis McMahon McMahon Commercial mcmahoncommercial

With 2012 now well underway, most people are coming to terms with the reality of being back at a desk with the sun shining and the rain a distant memory (the rain has been great for the farmers at least).

I have already had a wide cross-section of people ask me for my thoughts on how 2012 may play out as far as Commercial Property is concerned.

My response is that, as with any form of crystal-ball gazing, nothing is certain and everything is subject to unforeseen influences (just ask the people of Japan or Christchurch about that).

However, barring any further global economic shocks, I believe that, for the first half of the year at least, we will see a continuation of the latter half of 2011 with encouraging levels of enquiry and activity.

Tenants are still very much in control and looking for the best deals and who can blame them?

Locally, there are still too many vacancies around the CBD in particular, with the office market about to be hit hard with some significant relocations resulting in more empty office space coming onto the market.

These spaces will not be filled until there is a recovery in confidence generally in the business sector and with consumers.

This will not happen when the media continues to bombard us with apocalyptic scenarios involving a Eurozone meltdown.

Most commentators believe we are a couple of years away from the property cycle being back in gear and I am inclined to agree.

However, with bank deposit rates where they are and likely to remain there for some time, the returns form commercial property are hard to ignore.

Well-leased and located property is weathering the storm nicely and delivering good returns.

The key to this is Tenant retention and that will remain the case for some years to come.

I hope we all have a good year and that the Mayans were wrong.