Commercial Investments

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<p>Sydney's 420 George Street topped the list of major commercial investment transactions tracked by Savills in its Asia Pacific Investment Quarterly (Jan-March 2016) with a deal value of $442.5 million. </p>
<p>Savills note the purchase of <a href="/news/52811-cbd-office-market-briefings-q1-2016" target="_blank">420 George Street by Investa Property Group</a> for $442.5 million in March 2016. With a reported initial yield of 5.30 percent, the transaction reflected one of the tightest yields for an A Grade asset purchased by a local post GFC.</p>
<p>The list comprises nine deals, with second position going to Adelaide's Rundle Place, 80 Grenfell Street at $400 million, followed by 1 Woolworths Way in NSW's Bella Vista for $336.5 million. Incidentally, all three are office spaces.</p>
<p>Interestingly, Melbourne's 1 Collins Street was at the bottom with a transaction value of $125 million.</p>
<p><a href="/images/2016/07/18/Savills%20July%2020%20Chart.png" target="_blank"> Click to enlarge</a></p>
<p><img src="/images/2016/07/18/Savills%20July%2020%20Chart.png" alt=""></p>
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Sydney CBD office deal tops investment transactions in Jan-March 16: Savills 

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<p>Investors are moving beyond the traditional core markets and seeking alternative asset classes such as student accommodation where the fundamentals are strong, says the 2016 Australian Student Accommodation Market Report.</p>
<p>Growing investor and undersupply of student accommodation means that the market is changing rapidly. Savills research indicates that more than $2 billion of capital has been earmarked for development projects in student accommodation across Australia since the start of 2015.</p>
<p><strong>Yields</strong></p>
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<p><strong>Current Indicative International Yields </strong></p>
<p><span>The following table provides an indication of Net Initial Yields for prime student accommodation investments across several countries with emerging and established markets as at March 2016. The spread of the prime yield to 10-year bond clearly illustrates a lower spread for the more mature and liquid markets of the USA and the UK. </span></p>
<p><a href="/images/2016/07/06/Screen%20Shot%202016-07-06%20at%2011.50.36%20PM.png" target="_blank"><span>Click to </span>enlarge</a></p>
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<p><strong>Australia </strong></p>
<p><span>Net Initial Yields in Australia have remained relatively static over the last 12 months, primarily due to the lack of transactional evidence. There is strong sentiment to suggest that yields are in a downward cycle, given the weight of capital that has entered the market and also the spread of current yields to the 10-year bond rate compared to more mature transaction markets. </span></p>
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<p><span>The following table indicates the current net initial yields for Australia in 2016:</span></p>
<p><a href="/images/2016/07/06/Screen%20Shot%202016-07-06%20at%2011.55.53%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p> <span><img src="/images/2016/07/06/Screen%20Shot%202016-07-06%20at%2011.55.53%20PM.png" alt=""></span></p>
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