Investment in 'alternative' real estate surges to $8b
Investment in alternative real estate assets such as student accommodation and petrol stations surged to $8 billion in 2019 – a 42 per cent jump year on year – as property groups hunt for relative value in the property market.
Contributing to the jump in investments, according to the latest figures from Cushman & Wakefield, were two large acquisitions by Scape Australia – now the country’s largest student accommodation operator – which bought Urbanest’s student accommodation portfolio for $2 billion and the Altira portfolio for $700 million, on behalf of Allianz and AXA.
Charter Hall’s acquisition of BP’s fuel and convenience retail portfolio for $840 million, also pushed the total value of sales higher.
It came off the back of an already high level of investment in the alternative sector in 2018, with Woolworths selling its 540 petrol convenience stations to British retail conglomerate EG in a $1.7 billion deal.
“The ‘other’ sector in the past few years has often been driven by hotel sales but it looks like we are moving a bit more into the real alternative assets now like service stations and childcare centres,” said John Sears, Cushman & Wakefield’s head of research.
“With yields getting quite sharp across the board in the more traditional commercial property asset classes, more funds are looking for value in alternate sectors.
“The other thing is that some corporates and governments are taking advantage of the strong market to take properties off their books”.
The office sector dominated the market with the total value of transactions growing 15.9 per cent from $22 billion in 2018 to $25.4 billion. Retail fell by 21 per cent.
