Overseas investment in Australian office buildings continues to rise. Over half of Australian office building sales in the third quarter of 2015 were from overseas buyers. Foreign investment saw it’s highest quarter on record since 2005. Commercial property is expected to reach and potentially exceed the record 29.6 billion sales figure achieved in 2014.
Much of the interest is coming from Asia, and especially China, more specifically Chinese life insures looking to diversify their portfolios.
It’s also in the news that an unnamed Chinese property developer has bought a whopping 10,588 sqm of prime real estate at 82 Whitehorse road in Box Hill. Savills is rumored to have handled the transaction.
DEXUS Wholesale Property Fund (DWPF) acquired Waterfront Place and Eagle Street Pier in Brisbane for $635 Million and David Jones is looking to sell a few of their stores across the country.
Maurice O’Connell, the senior credit officer for Moody’s, has said that income growth rates will be higher this year in the retail sector with the office and industrial sectors not far behind.
With the Australian dollar hovering around 70 cents to the US dollar, office, industrial, and retail real estate should continue to look very attractive to offshore buyers, and not just from Asia. Sydney and Melbourne in particular have generated significant demand along side premium investment destinations like London, Germany, New York, and Sweden.
It is a common view that the recent fall in the Shanghai stock exchange will cause investment in Australian property to slow. It is likely that the crash will have the reverse effect. Chinese patrons and business will be looking to put their money that has been removed from the stock market into a safer investment. Currently, Australia is seen as an affordable low volatility option.
Contrary to popular belief, the equity market in Australia is poised to recover through 2016, with the all ords likely to push through the 6000 barrier. Foreign investors are well aware of this as well as the long term stability of the Australian economy compared to other developed countries.
