Image: Canva.
  • Despite lockdowns, NSW and VIC had the strongest investment activity
  • $11.5 billion was the transaction volume for Q3 this year
  • The signs are positive as vaccination rates move higher, among other factors

Dexus and Cushman and Wakefield have released their latest real estate quarterly reports, and of course, ASX-listed companies are starting to release their individual company reports too.


The Dexus Real Estate Quarterly Review Q4 2021 said there are positive signs for the real estate market, with vaccination rates growing and expected to hit targets throughout November for the various states.

Contractions in growth due to the extended lockdowns in New South Wales and Victoria were also expected to be recovered over the remainder of FY22.

The Dexus report noted its five key assumptions included:

  • Consumer sentiment and business confidence remain resilient,
  • Construction for houses and infrastructure will positively contribute to growth,
  • Employment trends are positive, also noting that the data is skewed by an absence of overseas workers,
  • Low-interest rates and accumulated savings will keep retail spending strong, and
  • Short term interest rates will remain low throughout FY22. The report also notes markets will price in modestly higher long-term yields over the next two to three years.

In the Cushman & Wakefield Marketbeat Australia Investment Q3 2021, transaction volumes for commercial real estate to be $11.5 billion in the third quarter of 2021 alone, and $43.6 billion over the 12 months to September.

The September quarter was reported by Cushman & Wakefield as the second strongest Q3 figure in the company’s CRE investment series, only beaten by the third quarter of 2019.

Quarterly commercial real estate investment volume ($A billion)

Image: Real Capital Analysis, Cushman & Wakefield.

The Marketbeat report found what may seem unusual: investment activity was strongest in New South Wales (NSW) and Victoria, accounting for approximately 39% and 30% of volumes respectively. That is despite the extended lockdowns.

State by state

According to Marketbeat, NSW transaction volumes were $4.5 billion, or 39% of the country, Victoria was $3.4 billion, or 30%.

While NSW and Victoria collectively accounted for almost 70% of the country’s transaction volume, Queensland came in at 15% with transactions totalling $1.7 billion, Western Australia with $539 million, and South Australia with $292 million.

Image: Real Capital Analysis, Cushman & Wakefield.

Dexus’ report said it expected strong economic growth in the medium term, with the two resource-heavy states Queensland and Western Australia to see ‘significant acceleration’.


Investors seemed to pounce while Sydney and Melbourne were in lockdown.

“Office investment has increased significantly in Sydney and Melbourne in the third quarter of 2021, in a sign of confidence in Australia’s largest office markets ahead of the return of CBD workers. “

Cushman & Wakefield

The company said that during the September quarter, investment into New South Wales and Victorian office markets was $2.5 billion and $1.9 billion respectively, with the combined total of $4.5 billion comprising 76% of nationwide quarterly office investment of $5.9 billion.

Some of the headline transactions included the $1.2 billion sale of Melbourne Quarter Tower to the National Pension Service of South Korea, and the settlement of CIC’s 50% share of Grosvenor Place, Sydney which came in at $925 million.

The remainder of the top five transactions in descending order were EY Centre in Sydney, purchased by Mirvac and M&G Real Estate for $578.5 million, Capital Square Tower 1 in Perth, purchased by Dexus for $339 million, and 275 George Street in Brisbane, purchased by Charter Hall for $275 million.

“Leasing activity across CBD office markets maintained momentum through recent lockdowns. Net absorption was positive in Sydney CBD and the Melbourne CBD in Q3 2021 recording 24,700 square metres and 24,070 square metres respectively, the highest since 2018.”

Dexus Australian Real Estate Quarterly Review Q4 2021

The Dexus report said that CBD vacancy rates have “started to stabilise”, however, “Total vacancy fell marginally across CBD markets except for Melbourne in Q3, with Perth recording the sharpest fall of 60bps.”

All positive signs of recovery and indeed growth, with more to come soon.

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