Knight Frank’s recently released Active Capital report has revealed that $US5.7 billion was invested into Sydney’s commercial property market in 2016.
According to the report, foreign buyers made up 55% of Sydney’s commercial property deals last year – placing it as a global investment hub.
“Sydney has definitely been the focus of offshore investment, accounting for 45% of inflows [in Australia] for 2016 and 2017 to date, followed by Melbourne (32%) and Brisbane (10%),” commented Jennelle Wilson, senior research director at Knight Frank.
“Investors are looking for security of income, liquidity and diversification. All equally important as are the ambitious corporate business plans of those looking to build global platforms.”
This level of investment meant that Sydney beat San Francisco, LA and Hong Kong, but it was behind London, Paris, Berlin, Shanghai, Dublin and New York –which saw $US16.3bn of foreign money invested into commercial property.
However, Knight Frank also revealed that the depth of foreign investment (compared with locals buying) varied greatly between the cities.
Overseas buyers accounted for 40% of commercial property investments in New York, while in London foreign investors were responsible for 80% of deals in 2016.
Knight Frank joint head of institutional sales Paul Roberts said record levels of rental growth, significant public infrastructure improvements and low levels of net supply over the next three years would see continued demand from offshore investors.
“In the emerging markets, such as Australia and the UK, interest and activity in the multihousing sector is growing rapidly,” the report concluded.
