Singaporean firms are dominating the number of foreign property investors in Australia, as the country’s attractive valuations continue to lure investors, according to a recent survey.
CB Richard Ellis (CBRE) figures indicated that for H1 2011, Singaporean companies comprised 19 percent of commercial and industrial property investment transactions in Australia, or 51 percent of all foreign realty investments by value.
This was a vast improvement from last year’s four percent of all purchases in Australia, or 21 percent of all foreign acquisitions.
Last year, Malaysian investors accounted for the largest group of investors at five percent of all purchases, followed by Singaporean investors.
In relative perspective, more than A$1.1 billion was invested into Australian property investments in H1 2011, against approximately A$440 million of investments in FY2010.
The H1 2011 figures were boosted by a handful of large transactions, such as the logistics joint venture (JV) between Government of Singapore Investment Corporation (GIC) and Australand Property Group involving the initial investment of eight prime industrial assets in Australia. The total value of these assets upon completion is A$220 million.
K-Reit Asia announced in July that it will acquire a 50 percent interest in an office building in Sydney’s central business district (CBD) for between A$154 million and A$170 million.
“Other markets in Asia have reached the top of the cycle; Singapore and Hong Kong, for example, are pretty expensive at the moment,” noted Neil Brookes, Director for International Investments (Sydney) at CBRE.
Properties in Australia, on the other hand, are still trading at 20 percent below 2007 values. This translates to higher yields, with prime Grade A office space in Sydney and Melbourne offering an approximate seven percent annual yield to investors, he added.
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