Sunshine state claims retail investment crown

But those looking to read an underlying growth trend into the numbers might be disappointed, with Savills National Head of Research Tony Crabb saying the figure was likely purely down to a lack of stock in the southern states, with both recording signficantly fewer transactions than Queensland.

“NSW, Queensland and Victoria have got over 80 per cent of Australia’s population, so the vast majority of Australia’s retail property is there, that’s where the vast majority of the turnover of property occurs, so in any given year its line ball which of the three states will come out on top,” he said.

“In 2016 Queensland had just over $2 billion dollars spread over 71 transcations but NSW had $1.942 billion in 49 transactions and Victoria $1.74 billion in 43 transactions.  It’s just the fact that there were more willing vendors in Queensland – if the property was for sale in NSW and Victoria they’d be snapped up.”

Half of Queensland’s sales during the year were to institutional investors – funds, REITS and superannuation bodies – and 30 per cent of investment value was attributable to just four sales.

These ‘big ticket’ sales included Mirvac’s $228m Toombul purchase, Clifford Gardens SC ($178m), The Myer Centre ($192m), and Runaway Bay SC ($160m).

Explaining the lower transaction numbers in NSW and Victoria, and the lower proportion of institutional investment, Mr Crabb said that a high number of big ticket retail sales had occurred in 2015, and buyers were likely looking to evaluate their portfolios and implement changes before making any decision to consolidate or expand.

Almost a quarter of sales in Queensland were to foreign investors and 16 per cent private investors – who are typically attracted to sub-$5 million assets according to Mr Crabb.

In NSW 30 per cent of transactions were made by foreign investors and 33 per cent by private investors.

In Victoria foreign buyers made up 30 per cent of investment, private investors 15 per cent, and institutions 43 per cent.

Nationally institutions made up 35 per cent of retail investment, foreign buyers 31 per cent and private investors 25 per cent.

The majority of foreign investors were from North America – almost entirely the US, according to Mr Crabb – who splashed $1 billion on retail stock.

This was closely followed by Asian buyers on a figure of $800 million.

Although the report did not disclose the countries encompassed in the report, Mr Crabb said that this group was likely to centre on buyers from mainland China, Singapore and Malaysia.