commercial aus
Despite the pandemic, commercial sales were relatively high over the past year. Image – Canva.
  • Figure falls short of the $46B recorded last year
  • Medical and industrial assets hit record-highs
  • Foreign buyers highly active, notably with office assets

While non-residential property transactions have fallen over the past year due to the pandemic, demand for commercial property remains strong with medical and industrial assets reaching all-time highs.

Casey Robinson, m3property research director, said there have been close to $41.7 billion in sales of commercial property, down slightly (-10%) compared to last year’s total of $46 billion.

Note, these figures cover sales of properties above $5 million.

“Demand for industrial remained high increasing by 34% on the previous financial year with the Blackstone Milestone and Fife portfolio acquisitions boosting the sales volume (with) the industrial sector seeing $14.95 billion in transactions across the major cities of Australia,” said Ms Robinson.

“The office sector followed with $15.69 billion but this figure is well down (-34%) on the $21 billion recorded in the previous financial year. Despite this, demand for suburban office assets was strong.

“Medical asset sales rose by more than 85% with $1.01 billion in sales compared to $545 million on the previous year as investors sought low-risk properties. The institutions have become increasingly active in this sector over the past five years with Dexus and Centuria being the most active buyers.”

Casey Robinson, m3property research director

It appears investors grew anxious about aged care and retirement homes – sales of these assets plummeted 77% to $812 million. This is despite reaching a record high during the previous financial year; aged care home sales were up by 500% with retirement village sales up by 300%.

Foreign buyers remain highly active with their take in industrial increasing by 44% compared to 23% the previous year – a figure inflated by the Blackstone deal, according to Ms Robinson.

“Foreign buyers were also big investors of office representing 53% of sales over the past year while retail sales were dominated by institutions who have made up for 35% of all deals.”

Ms Robinson added that while it was expected yields would soften across the board, yields have tightened across several asset classes over the past year. Industrial, single-tenanted large format retail and convenience-focussed retail centres were the standouts.

Total national sales volume FY 2021

commercial m3property
Source: Real Capital Analytics, m3property

Notably, CBD office markets, which witnessed depressed sales volumes, have seen their yields hold to tighten over the year in prime buildings.

Sydney made up the bulk of non-residential sales at just over $16.9 billion, followed by Melbourne with $10.5 billion.

In terms of office transactions, Sydney had the largest share with almost $8.5 billion in deals.

Melbourne enjoyed the most industrial sales at $5.36 billion – an extraordinary 90% increase on the previous year.

Across the board, sales fell in Brisbane – excluding the medical sector where $215 million in deals occurred.




You May Also Like

“Sydney setting the pace”: CBD office rents march higher

Cushman & Wakefield’s quarterly Office Marketbeat reveals 2.9% quarter-on-quarter uplift in Sydney

Canberra office market shows impressive resilience and growth

The market is underpinned by low vacancy, large developments in the pipeline and strong rental growth

Accenture and Lendlease to expand data insights platform

The platform which uses AI and virtual reality will be expanded to increase digital and in-store visits.

Demand for life science assets on the rise in Australia

Australians are getting older and this is contributing to the increase in demand for life science assets across Australia

Experts Corner by The Property Tribune

Ko & NPA partner to launch several co-owned luxury properties at Mermaid Beach, Gold Coast

Ko's partnership with NPA Projects provides more opportunities to co-own off-the-plan holiday residences, including exclusive Gold Coast properties

Continue reading

Top Articles

Perth property market: The definitive guide to buying a modular home

Modular homes, misunderstood as inferior, offer efficient, durable alternatives to traditional construction methods.

The 50 square metre solution getting people into their first homes and delivering an answer to ...

Small, modular homes could be a key part of the broader solution to Western Australia's current housing challenges.

The hardest time ever to buy a house in Australia: How Australian home buying got ...

We're currently in a buyer's market, but that doesn't mean Australian house prices are crashing.