This article is from the Australian Property Journal archive
VENDORS wake up, Europe's Axa Real Estate has opened a $A500 million cheque book to buy four office buildings in the Melbourne and Sydney CBDs.
Axa Real Estate is the property arm of Europe’s second largest insurer with 48 billion euros of assets under management.
Bloomberg reported that global head of Asia Frank Khoo said Axa Real Estate plans to team up with three investors with $A300 million of equity to buy four A-grade office buildings in Sydney and Melbourne over the next two years.
Khoo said Australia offers attractive yield levels with properties offering long-term leases.
Last month Axa teamed up with Eureka Funds Management to buy the Australia Post headquarters in Sydney’s Strawberry Hills for $168 million, on behalf of a Singapore family office.
“Investors are looking for a stable, long-term income stream, and in Asia there are only two real markets that can provide you with breadth and depth; that’s Japan and Australia.
“For a developed economy, Australia is still growing strongly,” Khoo told Bloomberg.
Axa Real Estate is targeting total return of 9% from Australian offices, including currency hedges.
Axa’s growing appetite for Australian offices comes at a time when investment in the sector is soaring.
This week Savills Australia revealed that $10.7 billion worth of offices changed hands in the 12 months to September, up 58% from $6.8 billion in the same time last year.
Savills’ head of research Tony Crabb said New South Wales recorded $4.4 billion of office transactions, accounting for 44% of total sales. Similarly, NSW had the greatest number of transactions (81).
The fund category was the most active purchasing 30% ($3.2 billion) followed by the foreign investor category accounting for 24%.
Sydney CBD accounted for the majority of transactions, reporting a total of $2.6 billion, or 34% of national CBD office sales in this period. This is up by 136% on the previous year where Savills recorded approximately $1.1 billion of office transactions.
The Melbourne CBD achieved commercial office sales to the total value of $2 billion in the year to September 2013, up 158% on the previous year ($799 million).
Property Review
