Investment in CBD office space in Australia’s capital cities grew by more than 20 percent in the 12 months to September.
The latest research from property consultants Knight Frank found transaction volumes for office assets in the nation’s major city centres was more than $3.8 billion over that time.
Speaking to the Property Council of Australia, Knight Frank Chief Economist Ben Burston said transaction volumes for 2024 were now expected to exceed the $4.6 billion recorded in 2023.
Mr Burston said investment volumes to the end of Q3 2024 had been the highest in Sydney at $2.2 billion, followed by Melbourne at $698 million and Brisbane with $580 million.
He said Q3 recorded investment volumes of $1.5 billion, while $1.8 billion was recorded in Q2 and just $477 million in office assets sold in Q1.
“Investment volumes for the past 12 months up to the end of September are now up 21 per cent compared to the previous 12 months.
“We expect to see a further pick up in deal momentum in the coming quarters, with investors now feeling more confident to act,” he said.
Mr Burston said the improvement in sentiment was due to several factors, including a change in the interest rate outlook and the commencement of a rate cutting cycle from multiple central banks around the world.
“Rates have now been cut across most major economies and real estate markets have responded positively, with the listed REIT sector rallying since July.
“Despite Australia being behind the curve in terms of rate cuts, our market has responded more strongly, indicating that investors anticipate that the correction is nearly at an end and that valuations will soon begin to recover.”
