Offshore investors target Sydney’s North West: CBRE

Offshore investors target Sydney’s North West: CBRE
Offshore investors target Sydney’s North West: CBRE

Sydney’s North West is trending into a sought after investment hotspot amid the soft development market and the investor rush to cash in on record low interest rates, according to real estate firm CBRE.

The recent sale of 2A Hector Court, Kellyville to supermarket chain Woolworths for $12.5 million through CBRE Capital Markets is a case in point. 

Tom Sheridan of CBRE’s Western Sydney Capital Markets team said areas such as Baulkham Hills, Castle Hill, Kellyville, Dural and Blacktown were particularly in demand from investors, mostly along busy thoroughfares and in neighbourhood centres. 

“The softening development market over the past five months is prompting buyers to park their money in investment assets, in order to benefit from historically low interest rates and tightening yields,” he said. 

The softening Australian dollar is also driving offshore groups to invest in Australia, with Asian buyers honing their focus on the North West, added Alex Mirzaian, senior manager, CBRE Capital Markets.

“In addition to the significant amount of local buyers in the market, including existing owner occupiers looking to expand, Asian buyers are targeting the region’s commercial and retail assets to acquire sites with a holding income,” said Mirzaian.

“Freestanding retail investments leased to blue chip tenants including major supermarket chains are sought after, with investors wishing to acquire these assets to anchor their property portfolios.” 

An oversupply of housing and undersupply of “community benefit stock” such as service stations, neighbourhood shops, grocers and food premises in Sydney’s North West was also prompting leading national brands to set up shop there, said Alex Ugarte of CBRE Capital Markets.

The elections and the debate on negative gearing has triggered a major shift in the residential market - which is contributing to the interest in the commercial and retail sector, he added. 

The sale to Woolworths was via an expressions of interest campaign, which saw strong interest from a range of investors due to the site’s B2 local centre zoning, according to CBRE executives. 

Tags: 
Residential Development Offshore Investment

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