Foreigners continue to dominate commercial property

by Miklos Bolza19 Jan 2017
Last year saw another strong year in terms of commercial property investment with $26.9 billion spent on the Australian market in the 12 months prior to December.
 
New research by Savills Australia shows that foreign investors provided the largest share of this, injecting $10.6 billion into the market. This equates to 39.5% of the total investment brought in last year.
 
Although this figure was 4.7% higher than the five year average of $25.7 billion, it was significantly down by 20% from the $33.7 billion spent in 2015.
 
“The 2015 calendar year was obviously the standout in what has been an extraordinary investment market over the last four or five years, and 2016 – up nearly 5% on the longer term average – was also a strong result,” said Tony Crabb, national head of research for Savills Australia.
 
“Given all indications from Savills offices in Australia and across the globe, there seems little doubt that both local and offshore investor demand will deliver another year of outstanding growth in 2017, the only qualification being a possible lack of stock.”
 
Looking at the breakdown by property type, investors spent $14 billion on offices, $6.5 billion on retail and $6.4 billion on industrial property. Foreign investors injected a significant portion of wealth into this accounting for 46% of offices, 31% of retail and 36% of industrial property.
 
With foreign investors leading the pack at 39.5% of commercial property investment, the three next largest groups included funds (18.6%), private investors (14.8%) and trusts (11.4%).
 


New South Wales experienced the largest cash injections for both office ($6 billion) and industrial sales ($2.7 billion) while Queensland dominated in the retail sector ($2.1 billion).
 
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