Over $1.6 billion worth of capital is set to be injected into Perth’s commercial property market, as Australian-based buyers look to secure office space in the City of Light.
Western Australia’s booming mining sector coupled with a stable economy compared to other states have made Perth an attractive proposition for investors.
CBRE’s WA Head of Capital Markets, Aaron Desange, said that although 2020 has been a turbulent year for the real estate market, Perth’s office sector continues to perform well.
“Despite concerns around the future of office, investor confidence for CBD office assets remains strong,” Mr Desange explained.
In Perth, the CBD very much remains the state’s business hub, which is reflected in current investment appetite levels.CBRE WA Head of Capital Marets – Aaron Desange
A CBRE report showed that the $1.6 billion of capital is competing for around $350 million worth of office space, with every dollar of office product available for sale in Perth, there is 4.6 times more in funds seeking to invest.
“As has been the investment case for some time, Perth offers a compelling investment profile given the attractive yield spread between eastern seaboard markets. As investors prioritise security and yield in a low return environment, Perth will continue to be a target market,” said Mr Desange.
CBRE Senior Research Analyst Nicholas Volk said that Perth was in a strong position to capitalise on the growing demand in comparison to the rest of the nation.
“A functioning economy that has successfully combatted the spread of COVID-19 to date, has allowed businesses to reopen and continue trading, giving investors a chance to see what a post-virus landscape may look like,” Mr Volk said.