- Australian office, retail and industrial asset sales surpassed 2020 levels
- Over $40 billion in sales were recorded for assets worth over $20 million
- Retail recorded 214% growth in 2021 compared to 2020
Despite ongoing disruption from the pandemic, the Australian office, retail and industrial sectors have all witnessed strong growth over 2021, with all three sectors surpassing 2020 for sales according to research conducted by m3property.
Almost $40 billion in $20 million-plus sales were recorded in sales this year.
$15 billion was recorded across office transactions, 60% higher than last year.
Retail witnessed 214% growth taking the sales value to $11.5 billion and $13 billion for industrial sales, representing a 49% increase.
2021 sales also exceed pre-pandemic levels.
Commercial Sales – Australia ($20M-plus assets)
Andrew Duguid, m3property director, said while office assets have seen a resurgence this year, they were well below the $25 billion high recorded in 2019. However, yields for prime office assets tightened this year.
Much of the industrial sector experienced growth due to the boom in online retailing – which, ironically, caused retail sales to decline last year.
Casey Robinson, m3property researcher, noted that the percentage of offices sold to offshore buyers fell from 56.7% in 2020 to 48.8% this year.
Institutions increased their share from 9.2% to 18.2% with Real Estate Investment Trusts (REIT) increasing from 14.6% to 22.6%.
“Offshore investors and Institutions were the dominant buyers of retail assets with the latter making up for 43.3% of all sales over 2021 while foreign buyers snapped up a 19.4% share.”
Casey Robinson, m3property
m3property added that the major investment themes encountered this year included portfolio sales, joint venture acquisitions and tightening of yields for prime real estate.
Joint venture sales are popular with investors given it facilitates the creation of strategic relationships with other market players while gaining entry or growing presence in new markets.