Decision time in Australia
THE Singaporean property buyers who have dominated the Australian market for the past three years - filling the void left by high-profile Japanese players - are now looking at their investments with special interest.
At the end of Australia's worst property downturn, and with the retail market being the first to emerge from recession, Singaporean and other Asian buyers may be wondering whether it is the time to trade or hang on for long-term reward.
There is much to consider before sellers reach for the telephone number of their favourite real estate agent Down Under.
Growing vacancy levels in the capital city CBDs have ushered in reduced rentals aligned to increased incentives and, consequently, lower capital values across the board.
According to Chesterton International's Asia Pacific Property File, office vacancies in Perth (presently 29.5 per cent), Brisbane (14.25 per cent) and Adelaide (10 per cent) should decrease by June 1994, although Sydney and Melbourne will show a marginalincrease in vacancy levels with projects still being completed in these markets.
The retail market has now overhauled the office sector as the preferred option and recent sales of major shopping centres across Australia highlight the shift.
The industrial market, said Chesterton, was being helped by a recovery in manufacturing in cities such as Sydney and Perth which had led to an increase in leasing activity.
Residential sales are also showing signs of improvement, especially in the prestige market where a recent barometer sale was that of Alan Bond's A$7 million (about HK$35 million) riverside home in the Perth suburb of Dalkeith.
The buyer was mining identity Ross Atkins.
Buyers from Hong Kong and Singapore have been active in pre-local release sales of Sydney's proposed apartment towers.
Sales of the four CBD or inner-city developments have been helped by Sydney's Olympic Games success and the Singapore Government's recent announcement that it has eased monetary restrictions.
Unit prices in Sydney are said to have increased 10 per cent following the Olympics announcement.
''Hong Kong buyers have a different profile from the Singaporeans because they are mainly buying as an owner-occupier with more emphasis on harbour views and less sensitivity to price,'' said a spokesman for the Richard Ellis group.
Perth, however, remains the target for many Asians buyers.
Overseas ownership of Perth CBD office properties has increased by 245 per cent since 1984, while Australian institutions have dropped out of the market.
''Southeast Asian investors are now taking the opportunity to acquire counter cyclic purchases at the bottom of the market,'' said the managing director of Hooker Corporate in Western Australian, Noel Carrig.
During the past year in the Perth CBD office market, private foreign investors accounted for more than 59 per cent of all sales above A$2 million with a further 7.2 per cent acquired by institutions.
According to Hooker Research, Southeast Asian investors had tended to focus their activity on small-scale property investments offering sound tenants with long leases in good locations.
All but two of Perth's central city five-star hotels are owned by Asian interests.