Direct investment in Australian real estate has increased from $2.59 billion in Q1 2012, to $5.63 billion in Q2 2012, according to DTZ.
DTZ’s Investment Market Update Australia for Q2 2012 says the number of deals increased by almost 25 percent quarter-on-quarter (q-o-q). The average deal size increased by 75 percent q-o-q, to $77 million.
The office sector accounted for 44 percent, or $2.49 billion, of activity. Foreign investment accounted for 46 percent of total investment in Q2, up from 24 percent in Q1. The report says in absolute terms, foreign investment activity increased from $0.6 billion in Q1 to $2.6 billion in Q2.
Private vehicles remained net buyers of real estate in Q2, according to the report, committing $1.24 billion. Institutions also increased in activity over Q2, investing more than $1 billion (net).
There was also a return to investment in New South Wales over Q2. Investment volume increased from $543 million in Q1, to $1.3 billion over 23 deals for Q2, and a record average deal size of more than $50 million.
Looking ahead, the report says a limited supply of high quality stock could lead to increased competition for assets on the market and increased off-market activity.
It says this will likely see ongoing demand for portfolio deals.