Australia – will Perth and Brisbane be the new hubs for commercial development?
This was according to analysis by #JLL, which showed that Australian investment volumes for office, retail and industrial real estate reached AUD 4.6 billion for H1 2012. This is in contrast to the AUD 5.3 billion seen in the first half of 2011.
Despite the significant drop, investment volumes had held up well considering the uncertain global environment, said John Talbot, managing director of the investment and advisory group at JLL.
"Office markets have proved resilient despite the caution amongst investors and occupiers. Sales volumes recorded for the first half of this year have almost reached the volumes recorded in the first half of 2011," he said.
"In terms of the outlook, the reduction in the cost of debt for well-rated groups is an interesting dynamic. It is now accretive for listed vehicles to buy office assets in Australia," said Talbot.
"For wholesale funds, the reduction in the cost of debt has lowered the weighted average cost of capital and makes property investment attractive.
"One of the hurdles in the market is the lack of prime-grade stock. A development cycle would create a supply of product, however there is limited development activity.
"The space market conditions point towards development activity in Brisbane and Perth over the next six to 12 months. We expect that this will create fund-through opportunities," he added.
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