Direct flights from Singapore set to boost commercial property market

The new four-times-weekly direct flights between Singapore and Canberra are set to have a major impact on the capital’s commercial property market, elevating the city’s importance in the perception of the overseas investor market.

Until now, when arriving in Australia, prospective Asian buyers were always taken aback to have to change to a small propeller plane for the transfer from Sydney, says Michael Heather, head of sales and investments ACT for global commercial real estate firm JLL.

“For the nation’s capital, it was never the best first impression of a city,” he says. “That was always a bit of a shock for some of the Asian investors. So now, with the new direct flights, that perception of Canberra will be changed dramatically.”

It will also put the city on many more buyers’ itineraries, believes Tony Crabb, national head of research at international commercial and industrial real estate agents Savills International.

“Direct flights are extremely important for the prospects of a city,” he says. “Many people will choose not even to go to a place when there aren’t direct flights. These will really put Canberra on the map.”

Already, an increasing number of Asia-based investors are turning to Canberra, attracted by the long-term leases offered with secure government tenants, better returns of six to seven per cent than they can secure in their own countries and lower prices than in Sydney or Melbourne.

Matt Winter, investment services executive at Colliers International – which over the last three years has overseen more than $1 billion in property transactions with Asia-based investment groups – is just back from a marketing trip to Singapore, Hong Kong and China’s Shenzhen and Guangzhou. There, he found hundreds of new investors looking to enter the Australian commercial property market for the first time.

With the new “Capital Express” flights starting on Singapore Airlines from September 21, Canberra will be so much more accessible to them all, he says.

“We are seeing a lot stronger interest and demand for the Canberra market because they can see its investment potential, its stability and its relative value, coupled with it being now much more open to the wider international market with the new flights,” Winter says. “Having this link is a huge new positive.”