The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
AFFORDABLE HOUSING DEVELOPMENT SUMMIT THIS THURSDAY
AFFORDABLE HOUSING SUMMIT THIS THURSDAY
EVENT DETAILSDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
17
print
Print
OtherTed TabetThu 19 Nov 20

Commercial Property Investment Down 61pc

d7760d8c-a849-40b0-ada9-4686e8670f62

The value of commercial property deals declined 61 per cent over the year as owners hold off selling through the pandemic, figures from Real Capital Analytics show.

According to the global data and analytics firm’s latest Asia Pacific Capital Trends report, sales of commercial property reached just $3.6 billion across the third quarter of the year.

The sharp decline follows a record year across 2019 in which a record $42.6 billion transacted on Australian shores, a 22 per cent increase in the value of transactions from 2018.

The trading volume of office properties, particularly in Sydney, fell dramatically. The amount of office space available for sublease in the city’s CBD is at record highs after surging 90 per cent in the last five months.

While a number of deals led by European groups closed across the year, other investors, most notably from the U.S. have been notably absent with capital into Australia retreating by 94 per cent compared with the average of recent years.

Real Capital Analytics Asia Pacific senior analyst Benjamin Chow said investment momentum had swung back to the domestic players in the third quarter as Australia’s international borders remained closed.


Interested in the future of commercial property markets? Join The Urban Developer’s upcoming commercial real estate vSummit.


“While there are already signs of pricing easing in the retail sector, office yields have remained stubbornly low up to this point,” Chow said.

“All eyes will be on the sizeable pipeline of office deals that was built up around the end of the third quarter, and whether these pricing levels can hold out until the end of the year.”

The collapse in activity has seen CBD office vacancies rise sharply, most notably in Sydney and Melbourne.

Data from JLL Research shows the Melbourne vacancy rate jumped 8 per cent to 11.3 per cent and the Sydney vacancy rate rose 4.3 per cent to 10.2 per cent.

The Sydney CBD recorded a loss of 94,500sq m of net absorption over the quarter, while the city’s sublease availability increased to 130,000sq m, 2.6 per cent of total stock.

The Melbourne CBD, which has been particularly hard-hit by the pandemic disruption, recorded a negative net take-up of 70,000sq m over the quarter pushing office vacancy to 11.3 per cent, from a low of 3.4 per cent in the first quarter.

All while new and recently completed stock continues to come online. According to JLL, Melbourne and Sydney account for 66 per cent of all office stock completed since the beginning of 2010, around 1.09 million square metres and 760,000sq m respectively.

The pandemic has continued to accelerate the rift in sectoral trends, with the industrial sector playing out as the most positive market while office, retail and hotel properties slumped.

The industrial property sector, which has benefited from a surge in e-commerce-driven warehouse space from demand as more people shop online during lockdowns, saw deal volumes outpace office investments across the September quarter.

Sydney was found to be the most active Asia Pacific market for this industrial property in the quarter.

Significant industrial transactions during the September quarter included Dexus’ sale of six assets into its joint venture vehicle with GIC for $270 million, and Charter Hall purchasing the OIA Glass portfolio for $214.6 million.

Real Capital Analytics noted that sales of commercial property across Asia Pacific fell by 38 per cent in the third quarter of the year.

Sales across the major income-producing property types dropped to $35.6 billion, down from $45.2 billion in the second quarter of 2020 and $58 billion a year ago.

OtherRetailOfficeIndustrialHotelAustraliaDeal
AUTHOR
Ted Tabet
The Urban Developer - Journalist
More articles by this author
website iconlinkedin icon
ADVERTISEMENT
TOP STORIES
Exclusive

Missing Heart: Why The Gold Coast Needs a CBD

Phil Bartsch
6 Min
Traders in purple Northsea Wollongong EDM
Exclusive

Affordable Housing Bonus Drives Mixed-Tenure Momentum

Clare Burnett
6 Min
Exclusive

Industry Stoush Looms Over Construction Code Pause

Patrick Lau
4 Min
Exclusive

New Wave of Capital Washes Over Evolving Surf Park Sector

Phil Bartsch
11 Min
North Sydney TUD Plus HERO
Exclusive

NSW Housing Fix Tips North Sydney into New Era

Vanessa Croll
7 Min
View All >
HB+B Orchard Hills EDM
Industrial

HB+B Plots ‘Benchmark’ $172m Western Syd Industrial Project

Clare Burnett
Exclusive

Missing Heart: Why The Gold Coast Needs a CBD

Phil Bartsch
Policy

Roundtable’s Housing Reforms Face Real-World Delivery Test

Vanessa Croll
A pause on code changes, faster approvals and a 5 per cent deposit scheme headline Canberra’s push to tackle the housing…
LATEST
HB+B Orchard Hills EDM
Industrial

HB+B Plots ‘Benchmark’ $172m Western Syd Industrial Project

Clare Burnett
2 Min
Exclusive

Missing Heart: Why The Gold Coast Needs a CBD

Phil Bartsch
6 Min
Policy

Roundtable’s Housing Reforms Face Real-World Delivery Test

Vanessa Croll
5 Min
101 Punt Road Windsor James Park Investments
Build-to-Rent

James Park Investments Plans 399-Unit BtR Windsor Tower

Leon Della Bosca
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/commercial-property-investment-real-capital-analytics