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SYDNEY: Foreign investment, particularly from Asia, is expected to continue pouring into Australian real estate, according to DTZ’s latest Australian Investment Market Update.
The recovery in the commercial real estate investment market is now complete with 2010's figure of A$12 billon (RM36.52 billion) already surpassing the preceding year’s figures of A$9.5 billion, with a quarter of a year remaining, said the DTZ report.
A 36% surge in commercial real estate investment transactions was noted in the third quarter (3Q) of 2010, compared with the preceding quarter. The office sector continued to be the most favored asset class with almost A$3.5 billion invested in offices across Australia in 3Q.
Foreign investments made up more than 50% of all transactional activity in the quarter under review, led by US-based Brookfield Properties' A$1.6 billion acquisition of 16 office properties in Sydney, Melbourne and Perth.
The Brookfield Properties investment aside, the most popular source of funds was from Malaysia and Singapore. Among notable investments was Malaysia's Permodalan Nasional Bhd acquisition of Santos Place, a grade A office tower in Brisbane for A$287 million on 7.45% yield in August and Singapore’s K-REIT Asia purchase of 77, King Street in Sydney for A$120 million.
This is the trust's second commercial acquisition in Australia this year after the acquisition of 275 George Street in Brisbane early this year.
While values in the prime markets are on a positive recovery path, values in the secondary market will take more time to recover. However, the report said that the secondary market will be aided by the level of activity in the commercial investment market overall.
The retail sector saw over A$1 billion transactions in 3Q 2010. The largest retail deal this quarter was the sale of Birkenhead Point Shopping Centre in Sydney for A$174 million.
The report also noted an improvement in the industrial sector activity over the previous quarter.
Investor appetite is only slowly returning to industrial properties following the global financial crisis, said DTZ.
DTZ noted that investment activity was concentrated on New South Wales, Victoria and Queensland.
Investors continue to favour New South Wales, although investment in Victoria and Queensland almost reached A$1 billion respectively this quarter, said DTZ.
The recovery in the commercial real estate investment market is now complete with 2010's figure of A$12 billon (RM36.52 billion) already surpassing the preceding year’s figures of A$9.5 billion, with a quarter of a year remaining, said the DTZ report.
A 36% surge in commercial real estate investment transactions was noted in the third quarter (3Q) of 2010, compared with the preceding quarter. The office sector continued to be the most favored asset class with almost A$3.5 billion invested in offices across Australia in 3Q.
Foreign investments made up more than 50% of all transactional activity in the quarter under review, led by US-based Brookfield Properties' A$1.6 billion acquisition of 16 office properties in Sydney, Melbourne and Perth.
The Brookfield Properties investment aside, the most popular source of funds was from Malaysia and Singapore. Among notable investments was Malaysia's Permodalan Nasional Bhd acquisition of Santos Place, a grade A office tower in Brisbane for A$287 million on 7.45% yield in August and Singapore’s K-REIT Asia purchase of 77, King Street in Sydney for A$120 million.
This is the trust's second commercial acquisition in Australia this year after the acquisition of 275 George Street in Brisbane early this year.
While values in the prime markets are on a positive recovery path, values in the secondary market will take more time to recover. However, the report said that the secondary market will be aided by the level of activity in the commercial investment market overall.
The retail sector saw over A$1 billion transactions in 3Q 2010. The largest retail deal this quarter was the sale of Birkenhead Point Shopping Centre in Sydney for A$174 million.
The report also noted an improvement in the industrial sector activity over the previous quarter.
Investor appetite is only slowly returning to industrial properties following the global financial crisis, said DTZ.
DTZ noted that investment activity was concentrated on New South Wales, Victoria and Queensland.
Investors continue to favour New South Wales, although investment in Victoria and Queensland almost reached A$1 billion respectively this quarter, said DTZ.
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