Australia in review: A look at the key 2016 themes affecting the A-REIT sector and the implications for 2017
The Australian property market continued to outperform against the broader market throughout 2016. For the 12 months to 30 September 2016, the A-REIT accumulation index increased 18.7 percent, compared with the Australian property market share price index, which increased 11.2 percent.
The attractiveness of yields in the sector and the strength of valuations have largely supported the performance of the sector. In June/July 2016, fears about Brexit had a short-term impact on the sector, but many commentators soon viewed the Australian real estate market as a relatively-safe haven compared with many international markets.
Capitalisation rates continued to be driven lower through the year, with valuations increasing, aided by overseas investors. The CBD office markets in Sydney and Melbourne continued to perform well, while Brisbane and Perth have been weak, affected by the weaker resources sector. Retail and industrial properties also performed well, in line with the br