About Michael Mannix

Get ahead with street-smarts plus experience
Cold Chisel never wrote a song about the commercial property market – although certain hotels figure prominently in their lyrics.

But that didn’t stop Michael Mannix from linking arms with a few thousand other children of the ‘70s at the recent Chisel reunion concert in Sydney.

“I’ve always been a fan of Cold Chisel” Michael says.
Cold Chisel was at its absolute peak when Michael left school to become a commercial property manager with an insurance company in 1982.

He’d originally intended to go to university to study Industrial Relations, but talent and opportunity combined, he did the working-class-man-thing and went out and got himself a job.

A few property booms and busts, a recession or two later combined with over 20 years work experience with owners and lessees in Australia and overseas has lead to Michael Mannix now being one of Sydney’s leading property consultants.

Whether its advice on leasing a property or tips on how to get yourself into the booming ownership side, Mannix’s unique brand of experience, direct involvement and down-to-earth advice can steer you in the right direction.

And the fact that he’s a sole operator means that his overheads are low and he can respond rapidly to client needs.

“I don’t have any internal staff meetings…only client meetings” Michael says. “But one of the best things about the commercial property industry is that you don’t have to be a large or even a mid-sized operator to get around the marketplace and truly add value."

“I’m able to offer my services to small, medium sized and large clients at a much cheaper rate than what they’d be able to achieve from the major firms.

“With some larger companies, the client might be signed up by the director who then disappears into the wilderness somewhere whilst the director’s staff take over.

“With me, I’m at the first meeting and I’m at the last meeting. Clients know exactly what they’re getting.” What they’re getting is a range of services including market research, investment and valuation advice plus counsel to commercial tenants and owners. This unique blend of expertise in the industry from all angles gives Michael the perspective that many operators in larger companies can’t match.

Beware of high vacancy rates
For example, Michael points out that low interest rates means that commercial properties are being snapped up at high prices, but vacancy rates in some markets are extremely high. So while landlords are paying big for decent properties, they are finding it difficult to achieve the appropriate return from rents. “You must assume that there will be some vacancy factor during the life of your investment ownership.”

“And tenants don’t understand why they should be paying top market rents or even stay a tenant when they could own their own property, and they can borrow the money at a low 6%.”

Investors consider property trusts
Michael says that by taking advantage of the range of investment trusts and other vehicles in the market right now, it’s possible for long term yield driven investors like DIY superannuation funds to purchase a share of a commercial property market without actually having to own a piece of commercial real estate.

“And there’s a manager to look after the properties and there ‘s a much higher yield than a city residential apartment, for example. It won’t sound as impressive at a dinner party, but in the end you may be having the last laugh.”

“You can purchase trusts which will spread your investment around in a range of properties. It’s a great way to get into the market.”

What to be wary of
So with interest rates low, is there any downside to buying commercial properties right now ? Michael says that the highly-charged market can sometimes lead inexperienced investors to purchase the wrong property.

“There’s such competition for the properties that the A-grade investments are getting snapped up at ridiculous prices, and therefore you can get pushed into the B-grade market. There, there may be maintenance issues, the property might not have the growth potential as the tenants might be paying above market rentals,” Michael explains.

“If it’s a B-grade property for investors, chances are it’s also a second-tier property for tenants, so it’s the one that’s going to be vacant earlier.

“Then if you get pushed from the B-grade to the C-grade property, then you can get into serious trouble unless you really know what you’re doing.

“In the currently overheated market, it is actually possible to lose money on real estate, or at least to not get the return you’re looking for, particularly if interest rates rise and business confidence falls.”

That’s why it helps to have street-smart advice backed by years of experience from Michael on your side.