The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Urban Leader Awards Logos RGB White
NOMINATIONS CLOSE SEPTEMBER 12 RECOGNISING THE INDIVIDUALS BEHIND THE PROJECTS
NOMINATIONS CLOSING SEPTEMBER 12 URBAN LEADER AWARDS
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
print
Print
OtherStaff WriterWed 20 Jan 16

Record Low For Melbourne's Office Investment Yields

A

Office investment yields have hit a record low in Melbourne after another standout year for commercial sales activity.

CBRE’s new Australia Office MarketView report highlights that 2015 was a bumper year for office investment sales, with $14.9 billion in assets changing hands relative to the 10 year annual average of just over $9 billion.

This contributed to a further tightening in prime yields in Q4 to average 6.1 per cent nationally – with Melbourne achieving record yields.

CBRE Associate Director, Research, Felice Spark said the $675 million sale of a 50 per cent stake in Southern Cross Towers had assisted in resetting market yields in Melbourne, with the sale struck at a yield of circa 5.1 per cent.

CBRE’s report tips further yield compression given ongoing investor demand, particularly from offshore buyer groups – not just from Asia but from Germany, North America, the Middle East and the Euro Zone.

“There are still several major transactions in due diligence or in negotiation which are expected to settle in Q1 this year. We are forecasting further yield compression in the first quarter of 2016, but then expect to see stabilisation, before some modest decompression later in the year, as a result of rising bond yields,” Ms Spark said.

In Melbourne, prime yields tightened by 32 basis points over Q4, 2015 to an indicative yield of 5.9 per cent - the lowest on record, compared to a previous low of 6.3 per cent in the December quarter of 2007. Secondary yields in Melbourne also tightened, by 25 basis points, to a record low of 7.0 per cent.

CBRE Executive Managing Director, Capital Markets, Mark Granter said interest from offshore investors was continuing to propel the Melbourne investment markets.

OtherOfficeAustraliaMelbourneReal EstateSector
AUTHOR
Staff Writer
"TheUrbanDeveloper.com is committed to delivering the latest news, reviews, opinions and insights into the best of urban development from Australia and around the world. "
More articles by this author
ADVERTISEMENT
TOP STORIES
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
Woolloongabba Precinct Vulture St
Exclusive

Brisbane Developer in Cross River Rail Compensation Tussle

Clare Burnett
4 Min
The Mondrian Gold Coast hotel's food and beverage is driving profits
Exclusive

Touch, Taste, Theatre: What’s Driving Mondrian’s Success

Renee McKeown
6 Min
Fortis’ display suites are designed as brand environments first, with tactile details and curated design to build buyer confidence before project specifics.
Exclusive

Relevant or Redundant: Will Tech Kill Display Suites?

Vanessa Croll
7 Min
Exclusive

Missing Heart: Why The Gold Coast Needs a CBD

Phil Bartsch
7 Min
View All >
South Melbourne social housing precinct
Affordable & Social Housing

South Melbourne Housing Precinct Revamp Takes Next Step

Leon Della Bosca
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
JQZ Parramatta EDM
Residential

JQZ Plots 10-Storey Addition to Parramatta ‘Auto Alley’ Plans

Clare Burnett
The Sydney developer is pushing ahead with a project it picked up following the collapse of Dyldam in 2020....
LATEST
South Melbourne social housing precinct
Affordable & Social Housing

South Melbourne Housing Precinct Revamp Takes Next Step

Leon Della Bosca
2 Min
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
JQZ Parramatta EDM
Residential

JQZ Plots 10-Storey Addition to Parramatta ‘Auto Alley’ Plans

Clare Burnett
3 Min
Aerial view of Caboolture and Bruce highway to Brisbane with Bribie Island Road crossing, Queensland, Australia
Policy

Queensland’s $2bn Push Opens New Housing Front

Vanessa Croll
2 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/record-low-melbournes-office-investment-yields