sydney office

Australia total office sales volumes reached $15.91 billion during 2015 which is 8.3% lower than the record high of 2014 which was $17.35 billion, according to the Knight Frank‘s report. On the other hand, investment in CBD markets increased in Australia, growing from $9.94 billion to $10.62 billion in 2015.

This occurred as investors, particularly offshore buyers,concentrated on the CBD markets of Sydney (58% of CBD sales) and to a lesserextent Melbourne (25% of CBD sales).

After the search for higher income yields fueled greater investment across non-CBD markets during 2014, this trend moderated in 2015. Although still recording a total of $5.29 billion in non-CBD investment over
the past year, this was 29% below the breakout levels of 2014.

As investors, particularly offshore buyers, embraced the concept of “lower for longer”, the relatively
tighter yields in CBD locations are accepted as a necessary barrier to obtain key locations or trophy assets for the long term.

Offshore investors were particularly active during 2015 accounting for 52% of total office sale turnover. There was a clear division in their focus with offshore buyers accounting for 60% of CBD transactions but
only 38% of non-CBD.

Headline transactions were the Investa Portfolio ($2.45 billion) and Barangaroo Tower 1 (c$2.0 billion)

2016 has started strongly, with a few key sales transactions taking place and a large number of assets on the market for sale or in due diligence.


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