Canberra properties attract foreign buyers

Foreign buyers, from Germany to Korea, have been steadily including Canberra commercial properties in their institutional portfolios as global investors search further afield for safe, long-term acquisitions.

Colliers’ national director of capital markets Tim Mutton says in a global economy of low returns investors  are looking far and wide for investments in cities that promise stability and healthy returns.

“Canberra ticks most of the boxes for these investors as our building stock is relatively young and there is such a strong concentration of government tenants,” Mutton says.

“Many of those investors are looking for properties over $100 million that might be anchored as the long-term headquarters of a government agency.”

Mutton says several countries are active in Canberra commercial acquisitions, with Singapore being among the leaders.

“They first came into the local market around 2012 with an ambition to diversify,” he says.

“There can be any number of factors that prompt institutional investors into a new offshore acquisition – domestic circumstances, new strategies and just sound opportunities.

“They have been attracted by the fact Canberra is the Australian capital, its centre of government and is regarded as a stable, secure investment,” Mutton says.

German investors first took a stake in Canberra about 10 years ago, while South Koreans have been relatively new entrants with the acquisition of the Louisa Lawson Building.

“South Koreans are getting low returns domestically and Canberra is attractive for long term, safe, returns,” Mutton says.

“Many of our commercial buildings are less than 10 years old and have very green credentials that further add to the appeal as safe investments.”

The Colliers director says Chinese investors are in a couple of different camps.

“The biggest institutional investors are driven by global economies of scale and are attracted to the opportunities in the big ticket, prestige markets like Sydney,” Mutton says.

“However, institutional investors in emerging cities like Hangzhou and Shenyang are showing an interest in less competitive locations and Canberra presents as a compelling prospect.”