How foreign investment in Australian commercial property hit a new record

December 15, 2021 09:06 PM AEDT | By Team Kalkine Media

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How foreign investment in Australian commercial property hit a new record — Image source: © Kgtoh | Megapixl.com

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Highlights

This year, foreign investment in Australian commercial property has hit a new annual record.

North America has contributed 39% of the total foreign investment this year.

Singaporean investors have also been the second most active buyer, accounting for nearly 35% of this year’s activity.

Although Australia has kept many tourists out of the country, it always welcomed foreign investment in its commercial property market. A recent report of CBRE shows how foreign investment in Australian commercial property has hit a new annual record with AU$16.6 billion in retail, industrial, office, and hotel assets.

The reason behind record foreign investment?

Foreign investment outstripped the previous record of AU$15.5 billion in 2015 despite ongoing border restrictions. Around 66% of foreign capital has come from the partnership with a local fund manager that accelerated the purchase activity.

As per the CBRE’s report, North America has contributed 39% of the total foreign investment this year. While North America has been the biggest contributor towards this record jump, Singaporean investors have also been the second most active buyer, accounting for nearly 35% of this year’s activity.

This year, deals that involved foreign investments include –

AU$538.2 million sales of a half stake in Sydney’s Queen Victoria Building.
AU$925 million sales of a 50% stake in Grosvenor Place to Blackstone.
The $3.8 billion sale of the Milestone industrial portfolio to a partnership between GIC and ESR Australia.
The Strand Arcade and The Galeries to a Link REIT/EG Funds partnership; and
The $315 million of the Sofitel Wentworth Sydney hotel to KKR, Futuro Capital and Marprop.

Experts predict that the Australian real estate market may boost in FY22 as more and more foreign investment is coming into the commercial property market.

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