The 2018 financial year saw $19 billion worth of commercial towers change hands as the Australian office market edged towards the bottom of the yield cycle.
The figures were dominated by the country’s leading office markets of the Sydney CBD, which is up 88 per cent, the Sydney Metro and Melbourne CBD, accounting for $10.8 billion, $4.3 billion and $3.9 billion of deals respectively. Also on the radar of investors was Brisbane, accounting for $2.17 billion worth of deals, while Perth drew more than $600 million in investment despite a near 20 per cent vacancy rate. Adelaide gained around $500 million in investment.
Some of the notable deals over the year are the purchase of 10 Spring Street, Sydney by Lendlease’s fund management platform for $270 million, 130 Pitt Street, Sydney, purchased by offshore funds for $229 million, and Mirvac’s sale of a half-share in 477 Collins Street, Melbourne development for $414 million to Singapore’s Suntec REIT. These all contributed to prime grade CBD yields compressing to 5.79 per cent.
Image source: James Brickwood
Article source: https://www.afr.com/real-estate/commercial/investment/office-deals-hit-a-record-19bn-with-cycle-close-to-peaking-20180806-h13lqx
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