Sydney has become the centre of global investment interest after Savills found that along with San Francisco, the city offers the most attractive investment yield in the world.
Research conducted by global real estate service provider Savills shows that Sydney has the highest returns for office investment with a whopping 6.62%, following San Francisco at 6.97%, making it a fruitful ground for international investors.
Savills National Head of Research, Tony Crabb says the average spread of yields around the world is between 2 percent and up to 4 percent, with Sydney on a little over 6 per cent the city is doing well for itself.
“These are very attractive returns in a low growth, low inflation investment climate,” Mr Crabbs said.
According to the research, yields in Perth and Brisbane are higher because of factors such as the mining investment opportunity whilst Sydney and Melbourne are lower as they deal with tighter effects of population growth that puts pressure on forced higher rents and lower incentives, affecting expectations of capital appreciation.
Mr Crabbs says the future of global interest rates remained low and were expected to remain low for the foreseeable future with Australian markets looking attractive on a global scale.
“As the world population ages, a great deal of retirement savings can be expected to chase yield. This, when combined with low interest rates, can be expected to keep downward pressure on income returns into the foreseeable future,” he said.
As the first research of its type, the data compares market yields, accretion and risk and offers buyer profile and price breakdowns for 43 cities which span across Asia, Europe, the United States and Australia.
