Australia's volatile stock market has seen self-managed superfunds dumping shares for quality commercial and industrial space in Melbourne’s city fringe following a wave of deals in the past week.

Knight Frank Associate Director Ben Hackworthy said that after 18 months of fairly flat sales activity, new commercial strata investments have taken off, with buyers taking advantage of the good returns and depreciation benefits.

“Purchasers are buying near new office warehouses at entry level prices from about $450,000 with secure five-year lease terms at yields at 8 per cent, annual increases of 4 per cent and strong capital growth, which compares favourably with the now struggling residential sector and the unstable share market,” he said.

Hackworthy and Knight Frank executive Chris Chartres sold a number of new office warehouses in Port Melbourne this week that had been on the market for a few months. The properties sold totalled more than $2 million and were located at 63-85 Turner St. and on Sabre Drive with prices ranging from $470,000 to $800,000.

Chartres said in each case, the properties were leased to well-known blue-chip tenants and were sold only weeks after the leases were signed.

Hackworthy said capital values have started to rise with the latest deals showing an average sales rate of about $2,700 per square metre.

“Yields are also firming which coincides with the rise in activity and enquiry level with some investments now sub 8%, levels not seen since before the GFC of 2008,” he said.