With a weak Australian dollar and low interest rates, the world is buying up Australia’s office buildings. Australia’s largest international commercial real estate investor, China have doubled their investment from the previous year to 12.4 billion in 2013-2014.
The ‘Foreign Investment Review Board’ has placed new rules on buying up property in the sector but this is predicted to do little to deter the buying spree. Hong Kong made a similiar attempt by placing a 15% tax on foreign investment in property to try and hinder a price bubble directly related to investments from mainland China. This did not affect investment and changes to policy and taxes in Australia won’t help much either. KPMG has predicted that a new wave of extremely wealthy Chinese investors will be entering Australia’s market over of the next few years.
Melbourne is Eager to Sell
Melbourne property owners are jumping at the opportunity to get a good price for their assets. CBRE is helping Harry Stamoulis list 277 William Street and a 23-storey building at 120 Spencer Street. Retail Employees Superannuation will follow suit by selling 460 Lonsdale Street in July-August. There are several other Melbourne buildings on the market including 222 Exhibition street, 114 William Street, 575 Bourke Street, and 161 Collins Street.
It’s Not Just the Office Market
It’s not just offices that have peaked Asian interest in Australia. In Sydney, the luxury hotel market is dominated by Asian investors. 1.9 Billion has been spent buying up Sydney’s five star hotels in just 2 years. By case of example, South Korean group Mirae Asset Global Investments bought the Four Seasons Hotel in 2013 for $340 million AUD. Frasers Centrepoint purchased five-star hotel Sofitel Sydney for $224 million and just last week, the Westin Hotel was bought by Singapore developer Far East Organisation and Hong Kong’s Sino Group for $445.3 million AUD.