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News release

AUSTRALIA

Australian commercial property volumes slower at the half year mark


JLL's preliminary figures for Australian commercial property investment volumes at the half year mark reveal a slower second quarter, with volumes for the first six months tracking lower than the same time last year.

The firm's figures show commercial property markets recorded $9.2 billion of sales (above $5m) across the office, retail and industrial sectors over the first six months of 2016. This figure is lower than the $12.8 billion of transactions finalised in the first six months of 2015. National investment volumes for the full year of 2015 were $32.8 billion.

Quarterly volumes for Q1 and Q2 were roughly in line with each other ($4.5 billion recorded in Q1 compared to $4.7 billion in Q2).  Large market transactions negotiated by JLL in the second quarter included the sale of a 75% interest in the 420 George Street office tower on behalf of Fortius and 1 Woolworths Way, Bella Vista on behalf of Mirvac. In May, JLL transacted the largest retail portfolio sale since 2010 – the sale of four shopping centres in Queensland and Victoria for $841.4 million on behalf of Vicinity Centres.

JLL's Head of Office Investments – Australia, Rob Sewell said, "Volumes remained somewhat steady in the first half of the year although several large transactions are likely to finalise over the coming months which will boost the overall figures by year end.  

"While investment activity is expected to remain firm over the balance of the year, we don't expect that transaction volumes through 2016 will match the record years seen over 2014 and 2015.

"Constraining factors will be domestic banks taking an increasingly conservative view of their exposures to the real estate market and a scarcity of investment grade assets.

"Foreign investor interest for commercial real estate assets in Australia remains strong.  While the Brexit outcome may have a short term impact on investor confidence globally, we view Australia as a potential beneficiary of market volatility. Recent events will only increase the appeal of a market like Australia which provide investors with solid long term fundamentals," said Mr Sewell.