Spore is top foreign investor in Aussie commercial property: Report PUBLISHED ON SEP 27, 2014 1:10 AM SINGAPORE is the top foreign investor in Australias commercial real estate market, according to a CBRE report. The report found that about A$18.8 billion (S$21 billion) of net foreign investment has been made in the country since 2005, with Singapore accounting for about 28 per cent or A$5.3 billion. Germany is next at 14 per cent, the United States at 13 per cent, and China at 9 per cent. The report noted that Australia represented 5 per cent of global property turnover over the past three years - well above the countrys gross domestic product weighting of 2 per cent. This has been driven to a large extent by foreign capital, with Australia reaping more cross-border investment than any other Asia-Pacific market between 2012 and 2014, said CBRE. Australia has attracted an above-average share of capital primarily due to firm and stable economic conditions, which have supported a higher interest rate and yield environment in comparison with other markets globally, said CBREs head of research for Australia, Mr Stephen McNabb. Foreign investors have included large global institutions and sovereign wealth funds like Singapores GIC, the National Pension Scheme from South Korea, Germanys Real IS, Blackstone from the US and Canadas CPPIB. Of the A$18.8 billion of net foreign investment, 68 per cent was for office property, 29 per cent for retail and 3 per cent for industrial assets. Foreign capital into Australia has been taking on an increasingly Asian slant, the report noted. From 2010 to 2012, about two-thirds of foreign investors were from outside Asia-Pacific. This situation reversed from last year. In total, Australia attracted about 12 per cent of Asian outbound capital last year and in the first half of this year. This momentum is expected to continue as new capital emerges from Asia, said Mr Rick Butler, CBREs senior director at international investments. Were also seeing continued interest in this market from institutional investors and sovereign wealth funds, with Asian developers also targeting opportunities to convert secondary office stock into residential apartments, he added. For example, Far East Organization has acquired four office assets in Sydney. The Fragrance Group and Aspial have acquired sites in central Melbourne for residential conversion. The report noted that prime office rents in central Sydney have doubled in 10 years. In comparison, many other established markets around the world have not fared as well, with growth ranging from 0 per cent to 50 per cent. Mr McNabb said he was optimistic that Australia will remain a hot spot for the next 12 to 18 months, although factors that have supported its relative attractiveness will fade beyond that. An improvement in economic growth in the global economy and a return towards normal interest rate settings, while appearing some way into the future, will be the likely catalyst. RENNIE WHANG - See more at: straitstimes/premium/money/story/spore-top-foreign-investor-aussie-commercial-property-report-20140927#sthash.Nlk1clvA.dpuf
Posted on: Sat, 27 Sep 2014 02:03:24 +0000
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