Chinese investors back in hunt for Melbourne properties
Chinese investors are again beginning to zero in on Australian commercial property, agents say, with a significant uptick in the number of Chinese buyers emerging in Melbourne in recent months.
CBRE’s National Director Investments, Mark Wizel, says although Chinese offshore investment has tailed off dramatically in the last 12 to 18 months, after years of enormous spending, there are green shoots of growth appearing in that portion of Melbourne’s market.
Wizel says Asian interest in sub-$100 million assets in Melbourne remains strong, despite restrictions on offshore investors remaining in place.
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“It now seems clear that Chinese money has begun to flow again and particularly within the sub-$100 million market,” Wizel says.
“How significant that is we will see over coming months, particularly towards the end of the year and into the new year with the conclusion of transactions.”
CBRE alone has sold 19 of 41 Melbourne properties – worth a combined $201 million – to investors with links to Asia since the start of July.
Over those 10 weeks the 41 properties transacted for more than $570 million – among them 277 William St in the CBD, which sold for $93.88 million, 105 York St in South Melbourne, which achieved $49 million, and Leader Newspapers’ former Blackburn headquarters, $30.2 million.
Wizel says the falling value of the Australian dollar is providing impetus for foreign investment, while challenges in the residential property market are also pushing more investors towards commercial property.
“The fall in the Australian dollar, to a 20-month low earlier this month, has without doubt been a motivating factor for Chinese buyers,” he says.
“Should the dollar fall further, and that may well occur as the US currency continues to strengthen, we are likely to see a greater level of activity financed by offshore money.”