Investors are set to spend more than $1.3 billion in office assets in coming months, which agents say will see the busiest start to a new year for some time.
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The properties are a mixture of premium, A and B-grade towers across the country. The sales are being made as owners take advantage of the rising demand for the safer haven of bricks and mortar, despite the tightening bond market.
Portfolio deals worth $US13 billion underpinned income-producing commercial real estate investment in the Asia-Pacific region, where volumes were little changed in the third quarter of 2016, compared to a year earlier, according to analysis by Real Capital Analytics.
Petra Blazkova, RCA's senior director of analytics for Asia-Pacific, said in Australia, market sentiment was positive, supported by relatively stable volumes of $US5.1 billion, which while down 13 per cent year on year, is still around its long-term average.
"Prices continued to trend upwards, with yields compressing across all asset classes and geographies. Analysis by RCA revealed that the premium to Australian government bond yields remained wide in historical terms, indicating that asset prices could still rise further," Ms Blazkova said.
JLL's head of office investments Australia, Rob Sewell said he anticipates steady real estate investment volumes over the next six-12 months, as relatively high spreads and the prospect of above-trend office rental growth should continue to attract buyers, while some owners will likely capitalise on tight pricings to realise gains.
While cash has been rolling into the retail sector for the past few months, the positive outlook for the office rental market has turned the spotlight onto that sector.
There is also incentive for the vendors from the recent sale of the DEXUS Property and DEXUS Wholesale Property Fund's combined interest in the office tower at 39 Martin Place, Sydney, for $332 million, a 49 per cent premium to the property's book value of $222.6 million at June 30 this year.
One of the latest properties said to be coming to the market is the 151 Property Group, formerly Valad's 241 O'Riordan Street, Mascot. Known as Gateway it was a formerly leased by Qantas and is considered an attractive asset, with a value of about $120 million.
Blackstone, an associate of 151 Property, is also in the market with a portfolio worth about $700 million spread across Brisbane , Sydney and Melbourne.
In Sydney's central business district, buyers are said to be closer to deciding on 66 Goulburn Street, the Masonic Centre, worth about $200 million, while assets at 183 and 185 Clarence Street are also on the market through Colliers International, with a combined value of about $25 million.
Healthy investments is selling its site at 8 Spring Street and 55 Clarence Street, worth about $120 million combined.
Eureka Funds Management is also selling its B-grade site at 56 Clarence Street, said to be valued at about $170 million.
Malaysian fund Kumpulan Wang Persaraan Diperbadankan is also offering the Securities Exchange at 20 Bridge Street to investors. The 14-storey building, managed by the Investa Office platform, was bought by Kumpulan in 2011 for $185 million.
