ASIA - Australia has seen commercial property investments soar by nearly 130% year on year, according to Real Capital Analytics (RCA), with both the company and Jones Lang LaSalle (JLL) highlighting it as a "favourite" for inter-regional investors.
According to RCA's Global Capital Trends, the continent's traditionally high yields - averaging 8.3% in the second quarter - had attracted foreign investors, who accounted for more than 40% of investment between April and June, while the 127% year-on-year rise had led to commercial sales amounting to AUD4.5bn (€3.4bn)
JLL noted its appeal as one of two AAA-rated countries in Asia Pacific, as well as its economic ties to its neighbours in Asia as a further reason.
It found that inter-regional inflows to the Australian market had risen by 442% year on year to US$1.2bn (€833m).
John Talbot, head of Australia capital markets for JLL, cited one example of foreign investment as the Canada Pension Plan Investment Board buying a 50% stake in Melbourne's Northland Shopping Centre for AUD455m.
"This illustrated the level of interest by international investors in Australia, attracted by our strong growth prospects amid a global slowdown," he said.
Breaking down the origin of foreign investors, RCA found an almost equal division, with 32% based in Asia Pacific, 29% in EMEA and the largest proportion of investors in the Americas.
Meanwhile, JLL said that, barring a swift Japanese recovery, China will become the largest property investment market in the world - with more than $5bn in transactions recorded in the country in the second quarter alone.
Examining the Asia Pacific market in general, Stuart Crow, head of Asia Pacific capital markets at JLL, said the region was attractive as rental increases were likely to keep step with inflation rates.
Head of capital markets research in the region Megan Walters added: "In the long term, occupier demand for Asia Pacific real estate will endure based on population growth driving economic growth and urbanisation. This provides an attractive stable income stream from rent for investors."
