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Sales transactions in the commercial property market almost doubled in the fourth quarter of 2013 from the figure 12 months prior, new research has shown.
According to the latest figures from CBRE, the quarter saw sales of office, retail and industrial properties total $7.1 billion, compared with $4.7 billion in the third quarter of 2013.
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Sales reached a record $24 billion over the full calendar year – up 70 per cent on the prior 12-month period.
Head of research for Australia at CBRE Stephen McNabb said the quarterly increase built on the strong momentum evident in the second and third quarters.
“There was a noticeable resurgence in transactions attributable to foreign investors in Q4, with foreign purchases of $2.1 billion being the highest quarterly purchase figure we have ever recorded,” Mr McNabb said.
“The majority of these purchases were in the office sector. This was also the strongest performing market with domestic purchasers as well – with office sales almost doubling in the past year.”
The number of actual sales did not see the same rate of increase, however, with a growth of 26 per cent on the previous quarter across all sectors.
According to Mr McNabb, this was due to the interest in large, high quality assets that has already driven higher average deal sizes as well as yield compression amongst prime grade assets.
While Mr McNabb expects to see a gradual decrease in the amount of foreign investment in 2014 as the rest of the world economy begins to improve, he said he did not believe this will signal an unwind of Australia’s existing position.
“There are likely to be some supportive offsets, notably an expectation that the Australian economy should be on a firmer domestic driven growth footing,” he said.
