Over half of all commercial sales in 2022 sold to foreign buyers
Offshore buyers are continuing to grow their investment in Australia, as the commercial volume of foreign sales dramatically increased in 2022.
New data from Ray White Commercial showed more than half of sales in the first quarter of 2022 were to cross-border buyers, with the bulk of commercial volume of sales recording $8.69 billion across 593 transactions.
The bulk of commercial activity came from NSW followed by Victoria together with accounting for 74 per cent of all volume.
Across the entire commercial market, foreign buyers increased their ownership of commercial property at an average rate of $4.93 billion per annum with institutions increasing on average $1.22 billion annually.
According to Ray White Commercial head of research Vanessa Rader, the research has shown huge numbers of foreign buyers entering the market.
“Over the last few years, foreign buyers have been dominating the landscape. Private buyers on average have exited the commercial market by a rate of $2.4 billion per annum,” Ms Rader said.
“Asian markets in particular are coming back in stronger numbers.”
Ms Radar told The Daily Telegraph that office assets and retail centres in particular had been in high demand.
The dominance of office and industrial assets came despite the slow uptake of people returning to work.
Data showed 43 per cent of offshore purchases were in office assets, totalling $4,866,247,238 in the first quarter of 2022.
“In terms of overseas countries, Asia is back – most notably Singapore. The US continues to be particularly strong in office asset purchases because growth in Europe in Germany is interesting.
“Historically they have been active pension funds etc but more recently they have not been in Australia much.”
The data also highlighted a decline in private investment, with private buyers accounting for 41 per cent of all commercial sales in 2021 – resulting in a reduced holding by 10 per cent of total volume or $6.31 billion.
Australia also remained competitive in terms of yield, with hotel investment coming back with further increases in 2022 fuelled by Singaporean investors that may drive a rebound in that asset group after a quiet two year period.