Commercial property on track for another record-breaking year

Preliminary CBRE data shows commercial sales now total $37.2bn and several major deals are in the works.

CBRE Pacific head of capital markets Mark Coster says it is likely that 2019 sales will hit a new record despite a marked drop in the number of transactions, which are 30% down on the five-year average.

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“More than any other year, 2019 was typified by large trades across almost every asset class,” Coster says, noting that the larger trades have been largely driven by mergers, private equity deals and structural changes for shopping centres.

Offices were the only sector to surpass previous levels, coming in at $23 billion or the highest on record, compared with $17.8 billion last year.

Retail sales volumes came in at $7.4 billion, down 25% on 2018, with the number of transactions down 37%.

Office deals are still being struck right around the country.

In the latest play, local group Prime Super and Adviser Whitehelm Capital have swooped on an Adelaide St, Brisbane tower for more than $150 million.

The deal, brokered by CBRE, will see the pair snap up 313 Adelaide St from global funds giant DWS Group, which owned the tower for about four years.

Local and offshore funds are chasing Brisbane’s office market for the relatively high returns on offer, as pricing in Sydney and Melbourne soars. The Queensland capital in particular is benefiting from the resources market recovery but interest in offices has surged countrywide.

CBRE’s Tom Phipps, Bruce Baker and Flint Davidson negotiated the off-market Adelaide St deal, and Matthew Lawrence of CBRE’s debt team arranged the debt facility.

Phipps says the deal highlights heightened onshore investor activity in Brisbane after the Queensland government decided to introduce a foreign land tax surcharge.

This article originally appeared on www.theaustralian.com.au/property.