Australian commercial property sale value well down in first quarter

In the first three months of 2021, which saw the lowest domestic investment in more than five years, bull interest rate foreign attackers halted the falling balance of transactions in the commercial real estate sector.

New research from Real Capital Analytics found that the value of commercial property sales fell 19 percent in the reporting period from 2020.

According to RCA, domestic investor transactions declined 42 percent year over year to $ 3.4 billion, while the value of properties purchased by international companies rose 83 percent to $ 2.5 billion.

“Cross-border activity could have been higher if Foreign Investment Review Board approvals for several high-value transactions had been accelerated,” the report said.

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North American investors were the most aggressive, spending $ 1.5 billion on a range of commodities, closely followed by the ubiquitous Singaporeans who spent around $ 1 billion on income generating real estate.

Revenue from development sites decreased 49 percent to $ 1.2 billion for a total business value of $ 7 billion. This corresponds to a decrease of 26 percent compared to the previous year.

RCA Asia Pacific Managing Director David Green-Morgan said the surge in international investment is a positive sign for the Australian commercial real estate market.

“This trend bodes well for the rest of 2021,” he said.

“This suggests that offshore investors have confidence in the recovery of the Australian economy as well as the commercial real estate sector.”

Retail was the surprising outperformer in terms of transaction value in the first quarter amid pressure from lockdowns and e-commerce, up 26 percent year over year to $ 1.7 billion.

“The recovery in retail stores is an important driver for the industry,” said Benjamin Martin-Henry, head of analytics at RCA.

“It shows how investors are being lured back with a slowdown in prices in the sector that has been plagued by structural headwinds like e-commerce for so long.”

Much of the increase, however, is due to a single deal: Charter Hall sold and leased back the David Jones flagship store on Elizabeth Street for $ 510 million.

“Investors continue to focus on high-performing retail stores like downtown convenience-based retail and high-density regional locations that support neighborhood malls,” the report said.

Office investment was $ 2.9 billion, slightly higher than 2020 levels. Several key transactions were completed, including the $ 800 million purchase of Martin Place Tower South by Manulife and Investa Property Group. Dollar.

Overall, office contracts in Sydney totaled $ 2 billion, followed by Brisbane for $ 344 million, much of which included Ashe Morgan’s $ 210 million acquisition of 310 Ann Street.

“The Perth offices rebounded on sales of $ 295 million, led by GIC’s purchase of 25 per share in Chevron headquarters for $ 220 million from Brookfield, which retained a quarter of the stake.”

Industrial businesses declined as all major players focused on Blackstone’s Milestone Logistics portfolio, which was sold to ESR in April for $ 3.8 billion.

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