Investors after a foothold in Australia’s commercial sector have been spending big, setting an annual record of $70.8 billion in transactions.
Deal volumes increased 69 per cent year-on-year, eclipsing the previous record set in 2015, according to the latest Australia Capital Trends report from Real Capital Analytics.
The report showed apartment buildings were the most tightly held income property asset with the volume of sales dropping 78 per cent.
Meanwhile, retail led the market with volumes increasing 138 per cent with several shopping centres exchanging hands.
The biggest deals were two industrial portfolios, Blackstone bought GIC’s 49 per cent share of the Dexus Logistics Trust for more than $2 billion and sold its Milestone Logistics Portfolio for $3.8 billion.
Blackstone continued to be a big player in the Australian property sector also making the biggest deal in offices, spending $925 million on a half share in Grosvenor Place.
This was followed by the EY Centre sale for $579 million when Mirvac teamed up with UK-based investor M&G Real Estate.
Acquisitions by property sector: Australia
| Property | 2021 | Annual Change | Change vs 2015-19 Average |
| Office | $21.9bn | 60% | -11% |
| Industrial | $28.0bn | 71% | 99% |
| Retail | $17.2bn | 138% | 11% |
| All commercial | $67.1bn | 80% | 24% |
| Hotel | $2.1bn | 55% | 24% |
| Apartment | $0.6bn | -78% | -27% |
| Seniors Housing | $1.0bn | 153% | -11% |
| Income Properties | $70.8bn | 69% | 20% |
^Source: Australia Capital Trends report from Real Capital Analytics
RCA head of real estate research Asia Pacific David Green-Morgan said Australia was a top performer, behind only Singapore and China for industrial sales and Singapore for office sales in the region.
“The Australian market has bounced back significantly better than many of our global peers, particularly in the office and retail sector,” Green-Morgan said.
“Australia is one of the very few major markets that saw retail volumes increase on pre-Covid averages.”
RCA head of real estate research Benjamin Martin-Henry said the Sydney office sector was once again the number one investment market despite persistent uncertainty surrounding it.
“Investors have shown a lot of faith in the Sydney office market with some significant transactions over the year,” Martin-Henry said.
“We also have another $2-billion worth of Sydney offices awaiting settlement, which is a promising sign.”
Meanwhile Australian investors were the most interested party in domestic retail.
Article Source: www.theurbandeveloper.com
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