Foreign investment in the Australian office sector has reached a record high, with new analysis by CB Richard Ellis shows that 70 per cent of all top end sales in the past 12 months have involved offshore buyers.
Foreign investment in the Australian office sector has reached a record high, with new analysis by CB Richard Ellis shows that 70 per cent of all top end sales in the past 12 months have involved offshore buyers.
Foreign investment in the Australian office sector has reached a record high, with new analysis by CB Richard Ellis shows that 70 per cent of all top end sales in the past 12 months have involved offshore buyers.
The review shows that major office sales, above $50 million each, totaled $2.4 billion in the 12 months to June 2010 taking into account 16 transactions.
Three office spaces in Perth's CBD were among those purchased by foreign investors.
Analysing the investment activity in the past 12 months, 49 per cent of purchasers were from Asia, with Korean investors accounting for 28 per cent.
This was mainly thanks to the purchase of Aurora Place for $685 million.
"Interest in investing in Australian commercial property remains high from Asian institutions. Aurora aside, a much wider spread of interest is emerging, with 12 per cent of the transactions in the past 12 months involving Singaporean purchasers and 9 per cent involving Hong Kong buyers," said CBRE Executive Director, Global Research and Consulting, Kevin Stanley.
"Just 20 per cent of the purchasers were from Europe, with 15 per cent involving long time Australian investors based in Germany and 5 per cent coming from Switzerland," said Mr Stanley.
CBRE's analysis shows that domestic investors accounted for just 31 per cent of all major office purchases in the past 12 months. Of these, REIT's accounted for the largest single purchaser group at 13 per cent.
"Local REIT's would typically represent 20 to30 per cent of all purchases; this is clearly still the missing piece of the investment scene in Australia," Mr Stanley said.
CB Richard Ellis Senior Managing Director, International Investments, Rick Butler said a series of additional sales to foreign purchasers were currently in due diligence which would suggest that the share of purchases to foreign investors would remain relatively high in the short term despite the proposed Rudd government tax reforms.
Under the draft Federal Government legislation foreign investors will have to conform with new requirements for managed investment trusts or face the prospect of having to pay the full company tax rate of 30 per cent on dividends and capital gains.
"Notwithstanding these proposed reforms, we are seeing an increasing number of Asian delegations in Australia, with the market being buoyed by the gains many of these groups have made from Asian stock market or property investments," Mr Butler said.