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JLL: Record numbers of foreign investors in Australia

Recent analysis from the property consultancy shows that offshore investors have acquired A$26.6bn of Australian commercial property over the last 10 years.

The number of foreign investment groups active in the Australian commercial property market hit a record 87 in 2016, up from a mere 7 recorded in 2006, according to analysis from global property consultancy JLL.

The data shows that investors from US, Singapore and China dominated the country’s major commercial sales in 2016, accounting for 40 percent, 23 percent and 16 percent respectively.

Just last week Shanghai United Real Estate, a mainland private equity firm set up by a group of ten Chinese property investors and developers, agreed to acquire the InterContinental Double Bay hotel in Sydney from the Singaporean real estate firm Royal Group for around A$140 million ($104.3 million; €93.3 million).

Overseas investors have acquired A$26.6 billion of Australian commercial property on a net basis over the last 10 years with office as the most popular asset class.

“The proportion of office acquisitions by offshore capital sources has steadily increased post the financial crisis in 2007 and reached an all-time high of 52 percent in 2015 before easing back to A$5.8 billion or 42 percent in 2016,” said Simon Storry, head of international investments for JLL in Australia, on the firm’s website.

Australia’s major markets, Sydney and Melbourne, have been dubbed high growth by JLL, while Brisbane and Perth are offering counter-cyclical opportunities.

In April, Savills Investment Management, the real estate investment management business of the London-listed property services firm Savills, completed its first Australian acquisitions of close to A$90 million in Perth and Brisbane.