Global investors favour Melbourne and Sydney property after London
2015-12-23
Melbourne and Sydney have been ranked second and third as favoured markets in 2016 by global property investors in an industry survey.
London remains the market of first choice for the 600 investors – including private equity, property companies, REITS, funds, institutions and sovereign wealth funds – surveyed in Colliers International's 2016 Global Investor Outlook.
New York ranks fourth, when comparing the preferred markets overall for global investors.
The survey, which takes the measure of investors with total assets under management of around $1.5 trillion, follows a number of headline deals by offshore buyers this year.
Among them are equity giant Blackstone's recent deal to acquire half of the Southern Cross towers complex in Melbourne for $675 million. In another major transaction earlier this year Singapore's Ascendas swooped on the GIC/Frasers Australand portfolio for more than $1 billion.
John Marasco, Colliers managing director of capital markets and investment services said the survey result was consistent with 2015 figures, which rank Sydney third behind London and Manhattan in terms of investment volumes from offshore investors.
"Sydney is considered a global gateway city so for investors it ranks up there with New York, London, Singapore and the like in terms of being an attractive destination for investment," he said.
"Melbourne is not far behind, and is seen as a good alternative to Sydney.
"Tenant demand is improving in both Sydney and Melbourne, with rental growth now occurring and vacancy rates reducing. This only adds to the appeal of these markets."
Real estate investment in 2015 is expected to hit a record high. Domestic investors still dominate direct real estate investment.
However one-third of total investment currently comes from offshore. China is now the largest offshore investor in Australian commercial property.
"Right now, Australian investors prefer to invest locally and we see very little investment offshore," Nerida Conisbee, Colliers national research head.
"This is very different from the previous cycle where Australia was the third strongest investor globally.
"This is beginning to change, with Australian superannuation firms starting to purchase properties offshore. It is, however, unlikely that we will see the same levels of offshore investment as we saw previously."
Among the super funds making headway offshore is AustralianSuper, which has taken stakes in United States office towers, a massive shopping centre in Honolulu and in a mixed-use project in London.
source: http://www.afr.com/real-estate/commercial/investment/global-investors-favour-melbourne-and-sydney-property-after-london-20151221-glsjai
London remains the market of first choice for the 600 investors – including private equity, property companies, REITS, funds, institutions and sovereign wealth funds – surveyed in Colliers International's 2016 Global Investor Outlook.
New York ranks fourth, when comparing the preferred markets overall for global investors.
The survey, which takes the measure of investors with total assets under management of around $1.5 trillion, follows a number of headline deals by offshore buyers this year.
Among them are equity giant Blackstone's recent deal to acquire half of the Southern Cross towers complex in Melbourne for $675 million. In another major transaction earlier this year Singapore's Ascendas swooped on the GIC/Frasers Australand portfolio for more than $1 billion.
John Marasco, Colliers managing director of capital markets and investment services said the survey result was consistent with 2015 figures, which rank Sydney third behind London and Manhattan in terms of investment volumes from offshore investors.
"Sydney is considered a global gateway city so for investors it ranks up there with New York, London, Singapore and the like in terms of being an attractive destination for investment," he said.
"Melbourne is not far behind, and is seen as a good alternative to Sydney.
"Tenant demand is improving in both Sydney and Melbourne, with rental growth now occurring and vacancy rates reducing. This only adds to the appeal of these markets."
Real estate investment in 2015 is expected to hit a record high. Domestic investors still dominate direct real estate investment.
However one-third of total investment currently comes from offshore. China is now the largest offshore investor in Australian commercial property.
"Right now, Australian investors prefer to invest locally and we see very little investment offshore," Nerida Conisbee, Colliers national research head.
"This is very different from the previous cycle where Australia was the third strongest investor globally.
"This is beginning to change, with Australian superannuation firms starting to purchase properties offshore. It is, however, unlikely that we will see the same levels of offshore investment as we saw previously."
Among the super funds making headway offshore is AustralianSuper, which has taken stakes in United States office towers, a massive shopping centre in Honolulu and in a mixed-use project in London.
source: http://www.afr.com/real-estate/commercial/investment/global-investors-favour-melbourne-and-sydney-property-after-london-20151221-glsjai
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