A wrap up of the commercial real estate transactions in 2020 reveals a very different story among the Top Deal Makers with Dexus making an abrupt U-turn from being the strongest buyer of Office assets to the strongest seller.
RESourceData assess the Top 10 investors by examining the Net Investment Position for each Investment Manager by adding the value of all the acquisitions made in each year and deducts the value of all their disposals in the same year.
This data shows how strong an Investment Manager’s convictions are, how deep their capital base is and whether this leads them to be strong seller or a strong buyer.
RESourceData shows that the Top 10 Buyers invested over $6.5bn (net of disposals) in 2020 across the Office, Retail, Industrial and Development sectors, down from $9bn in 2019.
The global pandemic reduced the overall volume of the real estate transactions in the market with $29bn of property changing hands in 2020 compared to over $46bn in 2019. The difficulty in getting access to quality stock meant that the Top 10 buyers in 2020 accounted for approx 14% of total activity, compared to 20% in 2019.
The Chart below shows the Top 10 Buyers and the The Top 10 Sellers in 2020.
It comes as no surprise that Charter Hall topped the buyers list with significant net investment into the Industrial and Retail sectors. Charter Hall invested substantially more than any other single group with a net investment of $2.1bn down from $3.2bn in 2019.
Deka Immobilien was the highest ranked net investor into the office sector with the acquisitions of 452 Flinders Street and 66 Eagle Street.
As noted above, the highest ranked net seller in 2020 was Dexus, who sold off $2.2bn of office assets, including 225 George St, 45 Clarence St, 452 Flinders Street and 60 Miller Street. These transactions were completed at a weighted average cap rate of 4.9%. For Dexus, the sales strategy was a complete reverse on the previous year in which Dexus were the strongest office investor with $2.4bn of acquisitions, acquired an average cap rate of 5.0%.
Dexus decision to off load assets came as the COVID19 pandemic placed enormous pressure on real estate mangers to provide rental holidays and face the prospect of falling values.
Dexus moved early to sell assets and reinvest proceeds in a share buy back scheme aimed at closing the gap between their share price and NTA.
In other sectors, investments into the Retail Sector were understandably absent in 2020 with Stockland and Woolworths the key sellers and Charter Hall and HomeCo the key buyers.
In the Industrial market, owner occupiers were the key sellers, with Aldi and Telstra among the biggest sellers and Charter Hall and Centuria the biggest investors into the sector.
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