Weekly Update 5/4/20215 April 2021
Welcome to this week’s Property News.
It was another relatively quiet week on the market, however portfolio auction sales by Burgess Rawson and Cushman & Wakefield generated a lot of interest in the alternative sectors where SMSF, HNW, Family Office and syndicate investors continue to find value.
The alternative assets include Fuel Stations, Childcare facilities and free standing large format retail tenancies. These assets are typically being acquired for their long leases, predictable rental increases, quality locations and strong tenant covenants.
The week marked the end of the 1st Quarter of 2021. We recorded $7.7bn of real estate transactions across the Office, Retail, Industrial & Development sectors – a 16% increase on the same period last year, and higher also on 2018 and 2019.
The Office market has struggled to gain traction this year with total sales dropping by -61% to $1.0bn for the quarter. The uncertainty over future tenant demand has caused the market to pause and re-think where the market may head. The uncertainty is evident across the CBD, metropolitan and regional markets where sales (& available stock) is far less active. Notwithstanding this, there has been substaintial interest in Macquarie Park and Brisbane each finding strong demand for quality leased assets.
Not surprisingly, the Industrial sector has continued to attract the most capital with 59 major sales for the quarter exceeding $2.4bn in total value, up almost 2.5x times the volume of sales in the 1st quarter of each of the last 3 years. The numbers were heavily skewed by the $1.6bn LOGOs deal to acquire the Moorebank Logistics Park from Qube Holdings.
Retail Shopping Centre sales were low at $820m, remaining in line with previous years.
The sale of land for Development was also very strong in the quarter with $2.5bn of property changing hands, up 31% on the same period last year and higher also than 2018 and 2019.