Asian cash eyes key Australian assets
International investors have earmarked Australia as a prime country in which to buy assets as the world recovers from the impacts of the global pandemic with Sydney seen as a target for its stable economy and high-quality buildings.
In the latest Asia-Pacific cross border investment data from CBRE, it reveals that after a muted year in 2020, outbound capital from Asia surged 69 per cent year-on-year in 2021 to $US54.6 billion ($73.53 billion) surpassing 2019’s pre-pandemic investment volumes.
Closely following the United States at number one, Australia has moved up three ranks since 2019, from 5 to 2, as the market with the most outbound investments from Asia. Sydney was the fourth preferred city in the overall region.
Mark Coster, CBRE’s pacific head of capital markets, said Australia has benefitted as investors seek out markets that provide growth, scale and a stable business environment.
“We have seen increasing interest across all asset classes, particularly office, industrial and retail, as well as strong inquiry from groups looking to invest in real estate debt,” Coster said.
From a global perspective, Singaporean capital dominated Asian outbound investment, accounting for six out of the top 10 outbound transactions. Singaporean investors deployed US$32 billion abroad, marking a significant increase of 164 per cent year-on-year.
A development likely to attract overseas-based investors is the Central Park DUO retail site which sits in the fast-growing tech precinct at the southern end of Sydney’s CBD.
The 1090 square metre retail strip is anchored by international retailers Starbucks and Kathmandu, who are supported by food and beverage operators and essential retailers. The site has price expectations of more than $25 million.
The asset is set to benefit from the evolution of the nearby Tech Central Precinct, which is undergoing significant rejuvenation and gentrification, with high-profile developments anchored by software giant Atlassian.
James Wilson and Harry Bui of Colliers are advising on the sale and anticipate the campaign to generate strong interest from private investors and syndications and small to medium super funds “given the trophy nature of the asset and the benefits from returning students and office workers”.
“Investors are targeting this precinct due to the development of tech Central set to bring 250,000 square metre of new office space and 25,000 innovation jobs,” Wilson said.
Bui added that asset the site benefits from the surrounding retail at Central Park Mall, Spice Alley and multiple tertiary education institutions including the University of Technology Sydney and the University of Sydney.
In Sydney’s south-west a high-exposure, 17,280 square metre landholding on 260-266 Hume Highway, has been listed for sale for about $23 million. It is currently leased to New Age Caravans and Sugarcane Australia.
CBRE’s Keegan Ridings and Tom Rourke have been appointed to manage the sale campaign on behalf of Rhaeto Pty Ltd, which has owned the site for more than two decades.
“With the ongoing maturing of the Warwick Farm Racecourse precinct and the Liverpool CBD, combined with the upcoming lease expiries, the site offers significant potential,” Ridings said.
The agents are expecting strong interest from investors and occupiers, given the property’s high-quality improvements.
“The property’s flexible B5 zoning also lends itself to redevelopment and land banking possibilities,” Rourke said.
