Colliers International 2016 Global Investor Outlook, an industry survey offering a unique perspective of real estate market dynamics, has revealed that investor sentiment towards market interest remains positive worldwide.
Colliers surveyed over 600 investors from various institutions including property companies, the funds sector, private equity, and many others. More than half of the participants have plans to increase real estate fund allocation this year, and only 11 percent discussed plans to decrease.
As for market favourites? London came out at the top for the participating investors, with Melbourne and Sydney ranking a close second and third respectively in the report.
According to Colliers Managing Direction of capital markets and investment services, John Marasco, the 2016 report was consistent with the 2015 figures, ranking Sydney third after London and Manhattan with regards to investment volumes from offshore investors.
He also said Melbourne does not fall far behind and is considered a good alternative to Sydney.
The appeal of these two markets is only increased by the improved tenant demand in both cities. Rental growth continues to be seen, with a reduction in vacancy rates.
While domestic investors continue to dominate direct property investment, offshore investors make a third of the current total real estate investment – with China being the largest commercial property investor in Australia to date.
Colliers National Research Head, Nerida Conisbee, said Australian investors continue to show preference for local investment, and the organisation has seen very little investment from Australian nationals offshore.
In the previous cycle and on the contrary, Australia came out as the third strongest investor globally.
As per Ms. Conisbee, all this is beginning to change as Australian superannuation firms begin to buy properties offshore. She did, however, admit that it is unlikely to see the same levels of offshore investment as before.
Australian Super is only one among the super funds that’s making headway offshore. It has taken stakes in office towers in the United States, as well as a shopping centre in Honolulu, and a mixed-use project in London.
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