Q2 2012 commercial sales activity has been more subdued than that for Q1, according to CBRE. Q2 Australian sales volume for transactions more than $5 million was $2.215 billion, while in Q1 this figure was $2.757 billion.
Rob Sewell, CBRE institutional investments regional director, says a lack of confidence is dampening investor demand and the willingness to take on risk.
“This is despite the fact that the case for investing in direct property has strengthened over the past six months, with government bond rates at historic lows and interest rates falling, creating the largest bond/yield spread seen in 20 years,” Sewell says.
All states, with the exception of the ACT, recorded a decline in sales. The most significant declines were in NSW and South Australia.
CBRE says one of the most significant changes to occur in Q2 was reduced activity from foreign investors.
In Q1 foreign investors accounted for 27 percent of all investment activity, which dropped to 14.7 percent in Q2.
Other managed funds, which CBRE says relates primarily to local super funds, became the most active buyer group in Q2,
accounting for 28 percent of all investment activity. This is up from 20 percent of buyer activity in Q1.
National sales over $5 million by purchaser type (Q1 and Q2)
By asset type, CBRE says all sectors slowed but the industrial sector saw the biggest drop, from $355.156 million in sales in Q1 to $190.175 million in Q2.
Joshua Charles, CBRE industrial and logistics services regional director, attributes this to stock shortages and not buyer demand.