E-commerce, warehouse demand push Australian commercial real estate deals to record $41 billion

“Although 2021 brought further lockdowns that left much home shopping and work behind, demand for retail and office real estate remains strong, with retail transaction volumes more than doubling and office transactions increasing nearly 20 compared to 2020 Percent have increased. “

After writing down large mall portfolios in 2020, mall investments picked up again this year, including AMP Capital’s initial $ 2.2 billion rush to the Gold Coast Pacific Fair and Macquarie Center in suburban Sydney in October when it partnered with super fund giants UniSuper and Cbus Property on Australia’s largest direct retail property deal to date.

By mid-December, retail investments had reached $ 11 billion, doubling the total value of $ 4.7 billion for full year 2020. However, that result was dwarfed by the surge into the industrial space, where the preliminary transactions are based on totaling $ 18 billion, dwarfing the $ 5.3 billion in deals made a year earlier.

Investment in office towers also improved to $ 11.5 billion, beating last year’s $ 10.2 billion, despite the uncertainty caused by the sector’s widespread adoption of flexible working hours and the home office -Created trends.

US private equity giant Blackstone also played a leading role in the office market with the acquisition of a half stake in Grosvenor Place, Sydney, worth $ 925 million.

“The risk averse investment theme that we saw in 2020 began to fade over the course of 2021,” said Andrew Ballantyne, research head at JLL in Australia.

“Capital has been deployed across the risk spectrum this year, from core investments to development opportunities. This led to an all-time high in the transaction volume for commercial real estate in 2021. “

“Investors have different views on sectors and regions, and this will ultimately lead to direct real estate opportunities in 2022 as portfolios are rebalanced.

“We believe that the real estate sectors affected by COVID-19 will see improved investor sentiment in 2022. In addition, the development of the digital economy and demographic change support the investment thesis for real estate alternatives for a number of subsectors. “

Local buyers accounted for 70 percent of the total this year, according to JLL, a percentage that could drop to 40 percent in the next year as more offshore players emerge after the international borders reopen.