Total transactions (by value) in the Pacific region in 2016 were down from the record breaking 2015. Investors from the Pacific in 2016 acquired 12% less abroad (compared to 2015) and investors from outside the region bought 30% less Pacific assets.
Whilst transaction volume was lower, Australia remains an attractive destination for capital with the net capital inflow from foreign purchasers approaching $30b since 2008. Buyers have been particularly interested in the core CBD office markets of Melbourne and Sydney which have historically produced the most stable total returns.
Consistent with the observations in the ‘H116 Pacific In & Out’ report, foreign investors most enamoured with commercial real estate in the Pacific tend to be institutional pension funds and REITS seeking assured long-term returns.