Approximately $2.4 billion of investment in Australia’s CBD office markets has been transacted so far this year, according to Colliers International’s latest CBD Office Research & Forecast Report.
According to the report, year-to-date figures show a combined value of transactions of $2.4 billion, matching the previous year’s figures. However, transaction volumes are slightly down, with 38 transactions Australia-wide reported for the previous year but only 34 transactions this year.
While leasing markets remain uncertain amid global economic insecurity, the report says investment in Australia’s CBD office market continues to be strong, with Canberra a standout.
“Across the board, we are seeing soft tenant demand in our CBD office markets, but this is not being reflected in investment demand, which, in general, is very strong,” says John Marasco, Colliers International Managing Director of Investment Services.
According to the report, Canberra CBD showed “exceptional performance” over the first half of 2012, driven largely by a marked increase in foreign investment, which amounted to $308.89 million, about 82 percent of Canberra’s total sales volumes.
Sydney CBD recorded the highest YTD volume of sales for 2012, with 10 transactions amounting to $541.63 million.
“In Sydney, prime grade yields have stabilised, while the yield spread between high and low quality secondary grade assets has continued to widen,” Marasco says.
Melbourne CBD experienced a rising vacancy rate and declining rates, but Nerida Conisbee, Colliers International National Director of Research, says Melbourne CBD office property remained highly sought, with particularly strong demand for Premium and A-Grade stock.
Brisbane CBD transacted $408.5million in major purchases in the first half of 2012. Perth CBD had four major transactions for the year-to-date, totalling $276.3million. Adelaide’s “investor interest remained broad-based”, Colliers says, but there were few major on-market offerings available to meet demand.