Adelaide, 15 February 2016- Investors are looking to Adelaide as an affordable alternative to other Australian capital cities according to CBRE’s Q4 2015 Office MarketView.
The report states that the comparatively higher yields relative to other cities, in particular Melbourne and Sydney, are attracting investors.
Felice Spark, CBRE’s Associate Director, Research, comments; “With capital values surging in the eastern states, some investors, who may have been priced out of these markets, have begun looking to Adelaide’s more affordable office market.”
“Investor demand is strongest for high quality buildings in core locations which carry a lower leasing risk,” Ms Spark added.
In 2015, over $212 million worth of office assets greater than $5 million transacted. This is below last year’s total of $500 million, however volumes are expected to pick up over the coming months as several significant commercial offerings hit the market. The largest of these is Westpac House, which CBRE is currently marketing and expect to achieve in excess of $180 million.
Also supporting investor interest is the South Australian government’s three year scheme to phase out stamp duty on non-primary production commercial property transactions, which was brought forward and commenced in December 2015. The abolition of this tax in conjunction with the city’s comparatively higher yields will likely aid in making Adelaide more competitive in attracting domestic and international investment going forward.
Philip Rundle, Managing Director of CBRE Adelaide, said potential buyers of Westpac House, for example, will save approximately $3 million in stamp duty fees.
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.