Aussie commercial property transactions rise

The number of commercial property transactions in Australia is increasing as the country’s economic recovery draws many investors seeking capital and income growth, according to CB Richard Ellis (CBRE).

Nearly S$3.3 billion worth of properties have been sold in Q3, up 75 percent over the same period last year, according to the world’s largest commercial property broker.

Nearly 70 percent of the total transactions account for office properties, when on average they make up 50 percent, it said.

“This type of stock is ready to sell, with a large number of new office buildings featuring long leases and attractive depreciation benefits available for incoming investors,” said Kevin Stanley, executive director for global research and consulting at CBRE.

Many investors are lured by the “bright prospects for income and capital growth in the office sector” fuelled by the recent job growth, he added.

Australian employment growth exceeded estimates in August, with many employers adding 30,900 workers, bringing the jobless rate down to 5.1 percent.

While the increase in property transactions has not pushed rents up yet, the increase in vacancy rates in major markets in the country has slowed, added Mr. Stanley.

According to CBRE, industrial property transactions accounted for 23 percent of the total Q3 sales, while retail accounted for 7 percent.  Foreign investors acquired 42 percent of the total properties for sale in the quarter and 36 percent this year. On average, they accounted for approximately 15 percent of the total properties up for sale.