Chapter 1: What recent event impacted Scott O'Neill's life?
It's the Real Estate Podcast, brought to you by Ray White, the largest real estate and property group in Australasia. And welcome to another episode of the Real Estate Podcast. And we're talking with Scott O'Neill from Rethink Investing. G'day, Scott. G'day. Good to be back. Thanks for having me.
Since we last spoke, there's something that's happened which I think you should really sort of come clean and tell the listeners a little bit about. You broke your arm, and how did you do it?
I was down on a little surfing trip in Melbourne of all places. They've got this urban surf, they call it. It's like a man-made wave in like an industrial area near the airport there. And in between sessions, I was just rushing and I thought I'd take a little shortcut over a fence and then...
It slipped on the fence, landed straight on my arm and it ended up sending the ball and socket through each other. So it shattered it down the elbow and yeah, pretty painful. I thought I just popped the elbow. So I was trying to like Google tutorials of how to unpop your shoulder and sorry, not shoulder, the elbow rather. And yeah, it definitely didn't work.
And three days later I had surgery and they put a carbon fiber elbow in there now. So yeah, strange few days, but I wasn't expecting that.
Was that a typical Aussie male where you didn't go to the emergency department straight away?
No, because it popped out sideways and I thought, oh, it's just come out of the socket. It didn't feel like a break and I thought, I've seen lots of movies where they've unpopped things and to be honest, I didn't really want to wait 90 minutes to get into the ambulance and I thought there's got to be a shortcut here, but definitely not.
Yeah, typical Aussie, typical Aussie, it's coming through. We should also mention that we've got a brand new podcast series with you and it's called Let's Talk Commercial Property. And this is going to be a good one because lots of people sitting on the fence kind of thinking about commercial property. We're going to really sort of take some deep dives, sort of unravel this.
And I think this will be quite educational for the listener.
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Chapter 2: Why is commercial property gaining attention over residential property?
You know, the world has changed. So... It's about identifying the opportunities and the capital growth will come if you invest well. The proof's in the pudding. We've seen, as I said before, like industrials probably led the way with capital growth. That's sitting at somewhere between 10 and 15% between each capital cities per annum the last three years. Retail's not far behind that as well.
There's obviously weaker aspects of retail, but essential service retail's going very strong as well.
And I guess, you know, it's a brand new year, 2022. Not that new though. We're soon going to be in March. But what are some of the best buys do you think to be had in 2022 when it comes to commercial property?
I like to sort of invest relatively counter-cyclical just to get a good buy day one. And I feel like retail is a pretty good time to start looking at it again. It's still got a bit of a stigma attached to it because of COVID. There's some areas I still would avoid like the plague, but there's other types of like suburban retail shopping centers, things like that. They're performing well.
And I think that trend is just going to continue because they're priced pretty decently at the moment compared to industrial, which is white hot at the moment. Everyone wants industrial. It became almost like the gold of commercial property once COVID hit because all businesses moved online. There's obviously supply strain constraints so people are storing more, manufacturing more in Australia.
Everything under an industrial roof is doing pretty decently relative to the rest of the economy. So that will continue to go strong. But there is a premium you need to pay to get into that market now because it is priced almost like a safe haven asset. Office space is the most countercyclical angle you could go with.
And I'm all for office space if it's unique or it's just not an oversupplied type of asset because you can buy better. You can still get yields maybe 1% or 2% higher if you go into an asset class people are a little bit not as comfortable with right now. In five years' time, comforts shift for people. Industrial might be out of flavor in five years or office might be back in vogue.
You've got to invest for the long-term fundamentals of individual assets. But yeah, I like to keep an open mind with commercial property. There's never one direction you should go.
Well, it all sounds good as we talk commercial property and this is going to be a regular podcast series. This is the first one down. Hey, Scott, look after that arm and we'll talk to you again very soon. Will do. Thank you, mate. Have a good day. We connect you to the best real estate information across Australia, The Real Estate Podcast.
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