Low economic environment drives push to unlock hidden value in Australian real estate

Australia’s continued low growth economic environment will support a shift in investment sentiment in 2018, with strengthening appetite levels for counter cyclical opportunities and alternative asset classes amid the need to unlock hidden value in real estate

Australia’s 2018 Real Estate Market Outlook report forecasts the start of convergence from divergence in the commercial office sector, with all major markets witnessing declining vacancy rates and improving rental growth over the next 12 months.

CBRE Research Associate Director Bradley Speers said 2018 would be the cyclical peak for Sydney and Melbourne – underpinning greater investment interest in locations such as Brisbane and Perth.

“Brisbane in particular has already emerged as a counter cyclical investment opportunity – and will remain so throughout the year. We will see Perth and Canberra come more under the radar in 2018, as these markets become increasingly viewed as a favourable long-term investment hold strategy,” Mr Speers said.

CBRE’s Executive Managing Director, Capital Markets, Pacific, Bruce Baker said both Brisbane and Perth were already attracting significant levels of interest from capital, particularly in the core and core plus office sector.

“The availability of suitable investment product will be the main impediment to both these markets achieving record sales volumes in this sector in 2018,” Mr Baker said.

“Both Brisbane and Perth are set to benefit from the rebound in resource prices, which will flow through to both economies and are predicted to generate significant white collar employment growth.”

The report shows disruption would also be a key theme shaping the Australian property industry in 2018, with occupiers and owners alike now recognising the importance of embracing change to create greater value.

“The traditional real estate premise of ‘location, location, location’ is no longer everything for business success. Companies are increasingly understanding that better business performance now starts with understanding how technology could reshape their business,” Mr Speers said. 

Click here to read more about Australia’s 2018 real estate market outlook.