Melbourne’s controversial Fishermans Bend urban renewal precinct has been instrumental in making the city one of the top investment hotspots in the world, according to a new global report.
It joins the US cities of Austin, New Mexico, Miami, the Dutch city of Amsterdam, Germany’s Berlin and India’s Bengalaru on the list of cities identified in Knight Frank’s 2017 Wealth Report as presenting “exciting opportunities for private property investors in 2017”.
Melbourne’s growing population, projected to overtake Sydney’s by 2036, a 24 per cent increase in the number of workers based in the inner city in the past decade and consistently high performance in liveability indexes were other reasons for its attraction for investors, the report found.
The seven cities were identified as places “that are leading the way in developing a compelling mix of education, lifestyle, infrastructure, technology and real estate and, in the process, becoming the kind of vibrant, attractive locations where people want to work, shop, play and live”.
Fishermans Bend, along with other major mixed use renewal schemes, is set to continue Melbourne’s trend towards inner-city living and boosting office supply, according to the report.
The emergence of these projects “provides investment opportunities of a scale and diversity to appeal to large investors”, helping Melbourne remain a “primary location for global and domestic capital”, according to Knight Frank’s report.
Fishermans Bend involves the redevelopment of 450 hectares of previously industrial area in Port Melbourne and will be home to 80,000 residents and a working population of 60,000 by 2046, according to the report.
The project has been the subject of heated political argument, especially over height restrictions on new developments in the precinct.
The same report also identifies Australia as the eighth most-likely country to attract wealthy private investors.
And it found that diversification was the key reason these investors put money in to commercial real estate globally.
The report also nominated urban logistics’ sites as the commercial asset class to watch in 2017, as the increasing demand caused by the rise in online retailers contributed to a global shortage of these sites.
“Strong structural occupier demand and significant restrictions on suitable supply, combined with the opportunity to gain exposure to land in growing cities, make for a very compelling story,” the report said.