Foreign capital inflow into the Pacific (Australia and New Zealand) real estate market in 2018 totalled $8.0bn, slightly below the $8.2bn recorded in 2017. Whilst total transaction levels by value remained relatively consistent, offshore investment into the retail (68% growth y-o-y) and hotel (39%) sectors experienced strong growth, whilst offshore investment into the industrial (-26%) and office (-14%) sectors recorded noticeable declines. Entity-level transactions such as Oxford Properties’ takeover of the Investa Office Fund and ESR’s takeover of Propertylink were excluded from these figures.
As was the case in 2017, the US ($2.5bn), Singapore ($1.5bn), Hong Kong ($1.4bn) and China ($820m) were the main sources of capital inflow into the Pacific. The US (67% growth y-o-y) overtook Singapore (-37%) as the number one source of offshore capital whilst Hong Kong (141%) and China (-47%) switched places in third and fourth respectively. Offshore investment into the Pacific is traditionally dominated by Asian based investors and despite dropping to a five-year low ($5.0bn) the region nevertheless accounted for 55% of total transactions by volume.