$7b splurged on Melbourne, Sydney assets
Investors poured close to $7 billion into Melbourne's and Sydney's office and retail markets in the past year as they looked to increase exposure to the eastern seaboard.
The assets ranged from larger shopping centres to medium-sized offices, and the funds came from a mix of domestic super funds, Australian real estate investment trusts (A-REITS) and overseas property securities investors.
Jones Lang LaSalle Victoria managing director Andrew Wood said Melbourne's investment market sprang into action in November after being subdued for six months, and had enjoyed strong activity through the first quarter of this year.
"Investment activity was revived over the last quarter of 2012, with five sales recorded for a total of $193.8 million," he said. "This brought the total investment figure for 2012 to $872.9 million."
Jones Lang LaSalle NSW head of sales and investments Paul Noonan said investment in Sydney's CBD reached $4.29 billion last year - the highest since the company began recording in 1988 - and significantly above the $2 billion achieved in 2011.
He said the sales figure reported in the group's latest Sydney CBD Investment Market Review and 2013 Outlook was inflated by the $2 billion capital commitment to International Towers Sydney at Barangaroo South as well as the deals recorded as part of delisting the Sydney proportion of the Charter Hall Office Trust.
The remaining $3 billion was in retail asset sales in both states.
CBRE's head of research for Australia Stephen McNabb said sales activity increased significantly even during the past three months, with about $3.5 billion in property priced at more than $5 million changing hands - up 15 per cent on the corresponding quarter last year.
In the list for coming sales are the assets of GE Capital, which include 210-220 George Street in Sydney and 636 St Kilda Road in Melbourne.