Melbourne Office Market Posts Strong Performance
The Melbourne office market have posted strong performance figures, reaching a decade-high.
The office investment market has reported more than $1.55 billion of assets changing hands in the last financial year - a soaring value up 134 per cent in just 12 months.
These figures have been posted following five major deals worth more than $1 billion - 567 Collins Street, 90 Collins Street, 8 Exhibition Street, and 313 La Trobe Street.
Savills research shows trusts and funds have become dominant buyers in the office investment market, accounting for 66 per cent of deals compared to 38 per cent in 2011-2012.
These figures mark a surge in activity for institutional investors, who saw no sales during the economic crash and the 2 financial years that followed.
Savills' Victorian head of research, Glenn Lampard, said: "Institutional investors have been largely sidelined from the market, with finance difficult to obtain and lenders scrutinising the loan-to-value ratios of portfolios."
"That situation has now turned around, with institutions having re-positioned themselves and now seeking good-quality assets."
Savills recorded 25 commercial property sales made, worth $1.55 billion, in 2012-2013. 2011-2012 saw just 13 sales, worth $663 million.
The most expensive recorded deal came from Investa's Office Fund and Commercial Property Fund, acquiring 567 Collins Street for $460 million.
Jones Lang LaSalle's Victorian head of sales and investments Robert Anderson said the market was being pushed by demand for prime office assets. ''The next six months will see a bounce back in leasing activity and that will have the impact of creating a more positive investment environment for that end of the market.''