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In offices, private investor enthusiasm has been writ large with the sale of five-storey CBD office building, 104 Frome Street, Adelaide, in April. The sales campaign led by JLL attracted more than 100 enquiries, with the eventual buyer a local private syndicate, paying $14.2 million at an initial yield of 6.88%. It was South Australia’s largest office transaction for more than 12 months.
Fulfilling residential demand
Since 2022, Australia-based private investors have accounted for over 20% of commercial real estate purchases nationally, up from the usual 15%, reflecting renewed appetite for opportunities. A record $6 billion of private capital was deployed in 2022, followed by $5.1b of acquisitions in 2023.
Australia’s housing supply woes, including an acute under-supply of apartments, are creating pockets of opportunity, especially in the nascent build-to-rent sector, according to the JLL paper, What’s Driving the Melbourne Real Estate Investment Market?
Institutional investors have traditionally been the driving force behind build-to-rent housing but are slowing down development as they focus on markets where there have been more pricing dislocation. This is “creating an attractive opening for private investors to fill the residential supply gap”, says Andrew Quillfeldt, head of capital markets research, JLL. He highlights Melbourne’s 1.1% rental housing vacancy rate and 33% increase in rents over the past three years.
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This article was originally published by a www.us.jll.com . Read the Original article here. .