The commercial property market is expected to rebound next year, according to the LJH Commercial Property Market Monitor 2008, which reports a bullish short-term outlook for the commercial property market and an even stronger rebound in 2009.

Chairman of LJH Commercial Glen Peterson said the report - released in association with BIS Shrapnel - emphasises current market sentiment.

"The global credit crisis has certainly interrupted this year's upswing, and as a result we're seeing plenty of opportunities from our network of commercial offices across Australia," Peterson said.

"The report highlights that the current credit squeeze is only a temporary setback to the overall upward trend, with conditions pointing towards a strong rebound next year. There are astute investors in the market who are continuing to benefit from this year's setback, with some unique property investments delivering good value."

According to the report, current demand for commercial property is strong and vacancy rates are tightening, which is pushing up rents.

"Demand levels remain strong at this stage, which means vacancy rates should remain low and rental returns should continue to grow for investors," Peterson said.

The medium-term outlook paints a different picture, however, with the report highlighting that some commercial markets across Australia will have moved into a new, downturn phase of the property cycle.

Sydney's commercial market is likely to shift upwards and perform strongly.
"This predicted upturn in Sydney's commercial property market five years from now is a good reminder that each market is in a different phase of the property cycle," Peterson added.
"Some markets are up while others are down, and there isn't a single national property market, but rather a divergent series of markets across Australia that are at different stages of the investment cycle. A good example is the continuing buoyant conditions in markets associated with Australia's resources boom - those markets continue to benefit from many businesses expanding as a result of the increase in activity driven by the resources sector."