Singapore, 2nd Top Foreign Investor

Singapore, 2nd Top Foreign Investor In Aussie Commercial Property

AUSTRALIA – Property consultancy CBRE reckons that foreign groups invested a total of A$16.6 billion in office, retail, industrial and hotel assets across the country so far this year according to a recent report from The Herald Sun.

The top offshore investors are from the US, which accounted for 39 percent of the overall commercial property investment volume, followed by companies from Singapore, which made up 35 percent of the total figure.

Mark Coster, Head of Capital Markets for Pacific at CBRE, commented that the strong commercial property investment shows quick adaptation to the COVID-19 pandemic among industry players as well as among the sellers and buyers.

“What surprised us was how quickly the industry innovated in regard to acquiring assets during this year’s lockdowns and how overseas capital found a way to compete for available properties, including teaming with local investment partners,” he noted.

In particular, billions of Australian dollars have been pumped into Victoria’s commercial real estate (CRE) sector this year, with some office towers changing hands for hundreds of millions, as developers, super funds, wealthy families, and investment groups competed joining the fray.

For instance, the Grollo family sold a 14-storey office block in Footscray, Melbourne for A$223.5 million, making it one of the largest office transactions in the state for 2021. The buyer is Investment fund Centuria Capital, while the deal was brokered by real estate consultancy Knight Frank.

Langton McHarg, head of investment sales for the state of Victoria at Knight Frank, thinks that this year’s lockdowns had created “pent-up demand” for office buildings that rival those witnessed before the virus outbreak.

Interestingly, Knight Frank also negotiated for the A$200 million sale of 600 Collins Street in Melbourne, which was completed this year after the agreement was signed during the final days of 2020.

Property developer Landream had intended to construct a 54-storey tower designed by Zaha Hadid architects for the site, but sold the land to American developer Hines, which stated that they intend to resubmit a revised plan so that they can build a premium office tower.

Finally, Lendlease acquired a 19-storey office tower along 469 La Trobe Street in Melbourne for A$203 million. Given that the buyer also owns an adjacent building there, the deal could trigger a long-term redevelopment for both commercial properties.

The 469 La Trobe Street transaction was brokered by Jones Lang LaSalle (JLL) and CBRE.

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