Oz commercial property investment market leads Asia Pacific

Written by Ray Clancy

Tuesday, 30 August 2011 09:24

Australia is expected to remain the most active property investment market in Asia Pacific for the rest of the year as offshore investors seek quality assets in a mature market with growth prospects, according to the latest report from property services firm CB Richard Ellis.

Sales activity could also pick up after some listed Australian property trusts including Stockland and GPT unveiled plans to sell their assets to fund share buybacks or seek other opportunities.

There are more than A$10 billion of commercial property assets currently on the market, according to the Australian Financial Review.

In the second quarter, property investments in Australia jumped to $2.14 billion from $1.04 billion a year ago, accounting for 24% of all sales in Asia Pacific, CBRE said.

It was also the first time Australia had led the pack since the fourth quarter of 2006 when it represented 43% of all transactions in Asia Pacific, it added.

Kevin Stanley, executive director for CBRE's global research consulting, Asia Pacific, said Australia was likely to remain the most popular destination for investors in Asia Pacific for the rest of the year.

‘In a way that property is coming onto the market and the time taking to sell them at the moment, it is quite possible that the fourth quarter would be a climactic quarter to the year and represent quite a high share of Asia Pacific,’ Stanley told Reuters.

Australia, on average, accounts for 14% of direct commercial real estate trading in the region, Stanley said.

With low unemployment and a relatively healthy economy, Australian commercial properties offer a total annualised return of 10% and industry experts see rises in rents particularly in the office sector.
Foreign investors accounted for more than 30% of property investments in the first half of this year, double the long term average, CBRE said.

In the second quarter, the second most active market was Hong Kong, with sales value at $1.53 billion or 17% of the overall trading, it added.