Australia invested in a record 18.3 billion dollars’ worth of office space in 2018 according to Knight Frank. This compares to 18 billion in 2017. Sydney saw the most investment with 9 billion and Melbourne second at 3.9 billion.
Superannuation funds pushed growth in 2018 acquiring 2.3 billion dollars’ worth of assets including a $900 million investment in Sydney’s Quay Quarter Tower.
Super funds see office real-estate as a bond alternative with similar returns for investors but with the advantage of potential long-term asset value growth.
Melbourne has the lowest office vacancy rate in Australia 3.6%; even lower than Sydney at 4.6%. Melbourne is at a 10 year low and expected to drop even further to 3% according to the Financial Review and BIS Economics.
