Australia’s CBD offices maintain place on foreign investment radar

Australia’s CBD offices maintain place on foreign investment radar
Jennifer DukeAugust 5, 2014

CBD office markets in Australia are still seeing substantial foreign investment interest, with sales to foreign investors recently topping their 10 year record, according to Savills.

Approximately $12.8 billion of office sales, including those outside the CBD, were recorded in the 12 months to June 2014. Foreign buyers were responsible for 39% of the sales - $5 billion, explains Savills national head of research Tony Crabb who compiled the information.

During the 12 months, 246 properties were purchased. In the 12 months prior, the total was 199, and the five year average was recorded as 191.

Of $6.8 billion of CBD office transactions nationally, foreign investment totalled 47% of the purchases, or $3.2 billion, with much of the capital coming from Europe and South East Asia, as well as Mainland China.

Savills International Investments’ Ben Azar said the results were positive for the market.

“This is a very good sign for the Australian property market and as a result in key markets such as Sydney and Melbourne we anticipate further yield compression particularly in respect to quality long leased landmark assets,” said Azar.

"With such a depth of buying power we expect the off-shore capital to become even more competitive over the balance of 2014," he said.

Jennifer Duke

Jennifer Duke was a property writer at Property Observer
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Office

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