Market in small shops, factories 'peaking'

Property investors with small shops or factories should consider selling this year because the market is peaking, a researcher says.

Jones Lang LaSalle national research manager Justin Kean said yesterday that a shortage of property in those categories had inflated prices beyond a sustainable level and an adjustment was on the cards.

Rents would not continue to rise for buildings worth $1 million to $3 million for retail and industrial investments, and selling this year would get a better price than next year.

But Kean said the outlook for offices and large suburban retail shopping centres was better. Prime office stock in Wellington's CBD had particularly bright prospects.

"With the Government underwriting as much as 45 per cent of the Wellington market by size, as well as the market having a long-term vacancy rate which tends to run well below 10 per cent, prime assets in the Wellington office market are likely to remain fairly priced over the next five years," he said.