Australian commercial property deals totalled $11.7 billion in the first quarter of 2022, an all-time high for Q1, according to Real Capital Analytics.
Dealmaking across Australia rose 77% during the past 12 months, compared to the prior period.
“2022 has picked up from where 2021 left off, with record levels of transactions as investors continued to show faith in the Australian commercial property market despite mounting pressures on the global economy,” said Benjamin Martin-Henry, Real Capital Analytics’ Head of Real Estate Research, Pacific.
At an asset class level, the retail sector continued its recent good run in Q1 2022 despite lower levels compared to Q1 2021.
Four major retail assets were transacted in recent months, including GPT Group’s sale of Casuarina Square in Darwin to Sentinel Property Group for $397 million.
In the office sector, investment decreased 18% on the same period a year ago, but there were some encouraging signs with contracts exchanged on several significant acquisitions.
Major office deals that closed in the quarter include the purchase of Blue Tower in Brisbane by Marquette Properties for $422 million, and Abacus Property Group’s acquisition of 77 Castlereagh Street in Sydney for $250 million.
The industrial sector continued at full steam, with deal volume totalling $4.1 billion and eclipsing the retail sector that reported $2.7 billion in first quarter deals and the office sector with $3.4 billion.
For the hotel sector, dealmaking momentum continued following its 2021 rebound with deal volume more than doubling the prior 12 months.
“Overseas investors have long been attracted to trophy assets in the hotel space in Australia, and after a Covid-induced hiatus, they have returned in 2022 with some sizeable acquisitions,” said David Green-Morgan, Real Capital Analytics’ Head of Real Estate Research, Asia Pacific.
Overseas investors were involved in $4.7 billion of commercial property transactions in the first quarter, accounting for 40% of all acquisitions.
Cross-border players were involved in over $450 million worth of hotel acquisitions – almost double that of domestic investors.