There is at least A$20 billion (HK$160.7 billion) of purchasing capacity available now to buy core office assets across Australia, with strong interest flowing from offshore investors on to other investor groups.
Foreign investors were the dominant purchaser type across most Australian markets in 2011. However, we are now seeing increased interest for core properties from a range of other investor types, including re-capitalised A-REITS, superannuation funds moving into direct property, and syndicates.
We have identified 28 domestic and offshore wholesale funds and REITs who are looking to place at least A$20 billion immediately into Australian property. This estimate does not include private investors, either directly or via syndicates, which we also estimate consider are seeing to be having considerable growth, particularly for secondary assets.
According to Colliers International research, Asian investors made up 35 per cent of foreign investment in Australian property in Q3 2012. While we are seeing strong demand from global investors, and Singapore and Hong Kong-based groups, we are seeing more and more interest directly from China. Given China is Australia’s major trading partner, we expect this level of interest and investment to increase significantly over the years ahead.
Transaction levels for Australian CBD office buildings in the first half of 2012 are well up on the same time period for the previous two years. In the first half of 2012, total volume amounted to A$2.2billion, compared to A$1.5 billion for the same period in 2011 and A$1.3billion in 2010.
Over the past six months, transaction levels have been the highest in the Sydney CBD, followed by Canberra and then Melbourne CBD.