The commercial property market of Australia’s capital city is expected to attract a growing number of offshore investors this year, according to one property group.
Nick Perdue, Knight Frank’s associate director of institutional sales in Canberra, says there are numerous signs pointing to a stronger commercial market and more diversified attention from investors in the nation’s capital in 2016.
“Recent positive economic signs in Canberra are expected to help underlying market fundamentals. This includes a far more stable vacancy rate, stable incentives and forecast rental growth – all signs that the Canberra commercial market has reached the lowest end of its cycle,” he said.
Mr Perdue said Asian investors in particular are looking increasingly towards the Canberra market due to its secure, long-term government tenants.
“The current wave of Asian capital is looking to diversify away from Australia’s core markets and into higher-yielding regions, such as Canberra,” he said.
“With some volatility in global markets, Canberra is increasingly being considered as a safe haven within the context of the wider Australian marketplace. Australia remains attractive for offshore investors who are drawn by the low Australian dollar, cost-effective borrowing and government stability. And should the global volatility continue, there will be a case for the RBA to keep rates on hold, adding to the attractiveness of Canberra as a market.”
Mr Perdue noted that while Canberra’s commercial sector has not yet seen the levels of demand from Chinese investors that other capital cities have seen, this trend could change.