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Investment in Aust industrial property surges 70% in 2016

Finance Markets / Latest Activity

Australia

Jan 15 2017

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The Australian commercial real estate investment market recorded total investment volume of $9.7bn in Q4 with 2016 volumes reaching $30.1bn up slightly from $29.9bn in 2015.

 

Highlights include:

 *   Office investment was down year-on-year at $13.3bn (44%) in 2016 compared to $14.9bn in 2015 (50%).

 *   Investment in the industrial sector surged with volumes increasing from $3.1bn in 2015 to $5.2bn in 2016 – up 70%

 *   Private vehicles (mainly unlisted funds/investment managers) were the largest net buyers at $6.3bn. A-REITs ended 2016 $3.8bn in the red driven by non-core asset sales to recycle capital.

 *   Foreign investors accounted for $12.1bn of the overall volume. Although this was down 20% y-o-y, global investors nearly doubled their volume from $2.5bn in 2015 to $4.5bn in 2016.

 *   Outlook: investment volumes to sustain in 2017 - despite the likely upwards pressure on Australian government bond yields, the spreads to Australian commercial property yields still look attractive.

 *   Investors will continue to seek core assets despite constrained supply - metro Sydney and Brisbane CBD office markets are likely to be key targets.

 

To read the full report:

SOURCE: Press Release

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