It is the biggest single direct real estate sale in the Australian market, making CIC the third biggest office landlord in Australia, behind DEXUS and GPT Group. Without a doubt, the appetite of Chinese investments in the Australian commercial real estate market is enormous.
“Strong demand for Australian commercial property has driven strong capital growth and yield compression, particularly for prime office and retail properties in the major capital cities, with only a subdued positive impact on commercial property construction," ANZ Research Senior Economist David Cannington said.
“In comparison to previous cycles of strong capital growth in Australian commercial property, this cycle has not been supported by strong leasing conditions with demand for commercial property space aligning with soft business confidence and conditions across the broader Australian economy.
"While this trend reflects the elevated and stable returns offered by Australian commercial property to investors, it also presents some downside risk to Australian commercial property capital values in the event of an unexpected shock to global capital financial markets."
A research report published by Knight Frank shows that portfolio diversification, relatively low funding cost and a transparent regulatory environment are a few reasons that attracts Chinese investors to the Australian commercial property market.
Consequently, Australian commercial property investors are keeping a close eye on China and other Asian financial markets.