Rebound in office investment generates $6.5 billion in commercial real estate transactions
ASX-listed Dexus’ decision to take a two-thirds stake in the Atlassian office building in central Sydney, which is expected to be worth up to $1.8 billion and trade on a yield below 4% at completion, boosted office investment in the quarter.
Other noteworthy office transactions include the sale of a half stake at 101 Miller Street in North Sydney to Singapore-listed CapitaLand Integrated Trust for $422 million and the Blue Tower at 12 Creek Street in Brisbane, purchased by Marquette Properties for $391 million.
As buyers returned to malls in greater numbers, the commercial real estate investment sector also got off to a strong start to the year, with $1.4 billion in assets changing hands, not is not far from the first quarter record of $1.6 billion recorded in 2013.
Major mall deals included Sentinel Property Group‘s purchase of Casuarina Square in the Northern Territory from GPT for $397 million.
Rolling 12-month trading volume as of March 31 was $53.9 billion, the highest annual figure recorded by Cushman & Wakefield, surpassing the previous record of $51.9 billion recorded for calendar year 2021.
Of this annual figure, industrial (31%) and office (29%) properties accounted for nearly two-thirds of all transactions.
“Following a record first quarter, 2022 looks increasingly positive for Australian commercial property markets as local investments continue to provide attractive returns compared to many fixed rate and overseas investments,” Cushman said. . & Wakefield’s director of research, John Sears.
“However, rising bond yields from ultra-low levels in 2020 and rising interest rates are expected to put pressure on funding costs and could weigh on demand, as investors become increasingly more uncertain about the geopolitical environment.”