Hong Kong Top Investor In Australia’s Office Market
AUSTRALIA – Offshore investors are making a robust return to the country’s commercial property markets following a two-year break due to the COVID-19 pandemic. Their comeback is most evident in the office sector, especially in top-end office towers in the central business districts (CBD) of Sydney and Melbourne, reported Commercial Real Estate on Wednesday morning (15 June, SGT).
According to statistics from real estate consultancy Jones Lang LaSalle (JLL), Hong Kong entities were named as the top investor in Australian commercial properties, spending a total of A$1.28 billion in Q1 2022. The performance is primarily due to Hong Kong-listed Link REIT investing $1.13 billion in the Investa Gateway Offices portfolio, which comprise partial stakes in five office buildings – one in Melbourne’s CBD and four in Sydney’s CBD.
Investors from the USA came in 2nd after spending A$490 million in the period under review, including Blackstone’s acquisition of a 25 percent stake in Sydney’s Grosvenor Place for A$462 million.
At the 3rd spot are Taiwanese investors, who invested A$426 million. In particular, Shayher Group acquired Milton Green in Queensland. Completing the top five are South Korea (A$312 million) and Singapore (A$215 million).
JLL said it was a strong beginning to the year when compared to the performance in Q1 2021. All real estate sectors of office, industrial, and retail are up, with office transactions dominating to the tune of A$4.37 billion, representing a 59.5 percent year-on-year surge.
The recovery in office property investment demonstrates there’s rising confidence in firms successfully luring their staff to the office.
Stuart McCann, CBRE’s Head of international capital for Pacific and Southeast Asia, expects the office uptrend will continue
“Volumes for Q1 2022 show offices are back into second position in terms of the most traded asset class. That shows that concerns about the future of offices have well and truly abated and big global investors have a lot of conviction in the long term. And, they are keen to allocate more and more capital into the sector going forward, which I think is a really positive step.”
Looking ahead, Australia’s office market is expected to be healthy this year as more major transactions are on the horizon. For instance, Canadian property firm Brookfield put up for sale the 51-storey office building at 108 St Georges Terrace in Perth, and the commercial property is expected to fetch A$350 million.
Recently, Brookfield and Blackstone also divested Melbourne’s Southern Cross office complex to a property fund manager Charter Hall, which is supported by Singapore’s GIC. The transaction is reportedly valued at A$2.1 billion, making it the largest office deal in the country, exceeding the A$1.2 billion sale of the 34-storey office building at 699 Collins Street in Melbourne to South Korea’s National Pension Service.