Asia-Pacific investors look set to flock to Australia’s property market following South Korea’s National Pension Service’s decision to buy a prominant Sydney office building.
According to today’s The Australian, the move could herald the first of “a huge wall of capital waiting to flow into Australian real estate”.
The acquisition of the 44-storey office building called Aurora Place owned by Colonial First State Asset Management is said to be the biggest office sale in Australia almost two years.
The acquisition is one of several recent foreign acquisitions in the Australian real estate market by Asian sovereign wealth funds.
Alistair Hughes, chief executive of Jones Lang LaSalle Asia-Pacific, who was involved in the tender for Aurora Place, said: “We have clients who have billions of dollars to invest in real estate and their preference is Australia”.
Mr Hughes said that Asian wealth fund investors were attracted to the Australian property market because Australia was the only mature economy not to slip into a recession.
Mr Hughes also observed that foreign investors would rather put their money into Australian real estate, in which the legal framework is predictable and transparent.