A wrap up of the commercial real estate transactions in 2021 reveals the strength of convictions amongst the Top Deal Makers with ESR & GIC clearly ahead of Charter Hall and Logos in the investment stakes.
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 $9.6bn (net of disposals) in 2021 across the Office, Retail, Industrial and Development sectors, up from $5.2bn in 2020.
Whilst the global pandemic reduced the overall volume of the real estate transactions in 2021, the pent up demand fuelled the market further in 2021 with over $50bn of property changing hands in 2021 compared to over $30bn in 2020 and $46bn in 2019.
The Chart below shows the Top 10 Buyers and the The Top 10 Sellers in 2020.
Blackstone’s decision to sell major industrial and retail portfolios became the catalyst for a string of major deals in 2021 with ESR & GIC acquiring the $3.8bn industrial portfolio and a 2nd tranche going to PGIM & Manulife for $850m. Blackstone also sold 2 major retail Centres including Warrawong Plaza to Elanor Investors for $136m and Strathpine to YG Group for $267m.
Charter Hall were the 2nd largest investor in 2021 with a net investment position of $1.7bn. The Groups largest transactions included the acquisition of a portfolio of offices from South Korea’s AIP Asset Management, including 25 Collishaw Rd, Tuggeranong for $306m, the Australian Taxation Office (ATO) Building in Box Hill for $230.0 million, the Red Cross Building in Alexandria, NSW for $159 million. Charter Hall also acquired a further 50% of 275 George Street from Keppel REIT for $275m and 130 William Street in Brisbane for $248m. Unlike previous years, where the Charter Hall round-a-bout moved assets between funds, this year we recorded few disposals by the Group, with the previous Virgin headquarters in Bowen Hills being the most notable, sold at a loss for $70m.
The largest single asset sale of the year was by the sale of the Moorebank Intermodal terminal by QUBE Holdings. The facility was acquired by Logos for $1.65bn.
Centuria was very active in 2021 with over $1.1bn in transactions including over $700m of industrial acquisitions and $400m of office acquisitions, including 1 McNab Ave Footscray for $224m and 101 Moray Street South Melbourne for $200m. Centuria also held onto most of their positions with several industrial assets sales in QLD and WA.
In accordance with its strategy, Mirvac were a net seller of Office and Retail assets, instead investing more heavily into logistics and master planned estates. The group did however acquire the 50% interest in 200 George Street being sold by AMP Capital for $578m.
Several smaller Investment Managers entered the top 10 including EG Funds Management and Haben Property Group. EG Funds Management invested over $620m with significant office acquisitions in Sydney, North Sydney and Olympic Park, whilst Haben invested in similar amount in acquiring Retail assets including Wollongong Central from GPT and Casey Central Shopping Centre from M&G Real Estate.
Whilst not in the list, Dexus were large sellers or Office buildings (over $800m of sales) but also invested in the Perth Office market with the acquisition of a 49% interest in 98 Mounts Bay Rd for $339m. Dexus also invested $410m into a 25% interest in Warringah Mall as well as acquiring over $200m of industrial assets.
These results exclude the merger and acquisition activities that have also been evident in 2021, including with Primewest, Aventus and APN Property Group.
We expect 2022 will continue to see significant investment volumes into Australian real estate markets.
Whilst it is unlikely we will see another $3.8bn industrial portfolio change hands in 2022, we do expect to see more Retail and Office assets finding buyers seeking value in “recovery” assets which may provide an opportunity for higher returns.
Premium Members can review the 2022 Top 10 reports in RESourceData here
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