THE PROPERTY DEVELOPMENT REVIEW
under yields and seen future return expectations change from capital growth to income maximization. 3. Finally, the increasingly common theme amongst investors is the genuine desire to invest in energy efficient assets with wholesale funds now requiring assets and managers that are aligned to the implementation of ESG principles. Occupiers are also driving innovation in building technology and sustainable practices which will mean owners need to stay ahead of the trends or risk increased obsolescence. Talk us through the most significant deals you have transacted thus far in 2022. Transaction activity accelerated in final quarter of 2021 and recent sales we were fortunate enough to complete include: 12 Creek St complex, CBD $420 million – Feb 22 179 Turbot St, CBD $150.9 million – Feb 22 100 Creek St, CBD - $184.7 million – Dec 21 307 Queen St, CBD $214.5 million – Aug 21
acquisition. There is sustained demand from the US, in particular North America, and Singaporean buyers, and rising appetite from major German and Korean institutions. Australia offers tremendous fundamentals for foreign investors - political stability, low unemployment, strong corporate governance, market liquidity and favourable returns comparative to other global destinations. The uncertainty of the situation in Europe reinforces the desire of many European investors to increase allocations to foreign real estate investments. Brisbane continues to be one of the most active Australian markets and the demand for greater income returns will influence investor appetite for Brisbane investments. 2. The second is the current and expected shift in debt cost and the impact this will have on yields and investor behaviour. There is no doubt that the RBA will be wanting to move monetary policy back towards a more neutral setting from the current highly accommodative levels. The escalation in inflation has caused the RBA to change its narrative the timing of the withdrawal of monetary support, and it has now begun the process of raising the cash rate. Markets are anticipating a succession of cash rate hikes and this has placed a floor
those anchored by convenience retail tenants are firmly back in focus. Industrial investments have appreciated greatly in value as yields have closed the gap to office assets due to institutional investors changing their portfolio mix and as structural changes to the retail and supply chain sectors increase inventory and hence industrial space demand. How would evaluate the impact of the past eighteen months in your local market? From initial concerns surrounding the economy the market has proven to be unexpectedly robust and resilient. There were practical limitations for potential buyers to inspect assets during the lockdowns which did change the purchasing profile while these restrictions were in place. However investors did prove to be inventive and adaptive with offshore buyers forming strategic alliances or JVs to invest in Australian assets and private investors sought exposure to Queensland assets through local syndicators. What are your expectations for the commercial property market over the next twelve months? There are three key themes to watch over the next 12 months. 1. The first is the return of foreign investment through direct asset
April / May 2022 – 65
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