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Australian office investment activity increases in 2017

by Andrea Zander

Australian office investment activity in 2017 was 4 percent higher than 2016 levels, reversing the trend of the prior two years when falls were recorded, according to Knight Frank.

Office sales transacted during 2017 totaled $17.09 billion. Offshore capital accounted for 43 percent of the sales. Followed by unlisted funds/syndicates with 26 percent and AREITS with 9 percent of purchases by value.

Investment activity resurged within the CBD markets, recording $11.26 billion in sales across Australia—up by 30 percent on the supply-constrained transaction activity of 2016. Both Sydney CBD (up by 28 percent to $4.98 billion) and Melbourne CBD (up by 70 percent to $3.34 billion) led this resurgence and between them these two major Australian CBDs accounted for 74 percent of all CBD transactions. The Brisbane CBD cemented itself as the premier alternative CBD market with 13 percent of CBD sales in 2017 while the ACT also saw increased CBD activity, accounting for 4.5 percent of CBD transactions, on a par with Perth (4.5 percent).

Foreign investors in the Sydney CBD market totaled $1.98 billion in 2017, accounting for 40 percent of the total transaction volume.

Cross border investment interest in the Melbourne CBD accounted for 52 percent of total sales by value, totaling $1.74 billion across eight transactions. This was more than double the volume achieved in 2016. Offshore investment in 2017 was dominated by Asian-based groups, led by Singaporean investors however Chinese and U.S. investors were also active.

And in the Brisbane CBD market offshore investors accounted for 70 percent of turnover in 2017, offshore purchasers acquired $1.06 billion of assets in the CBD.

 

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