Make way for Foreign Investment in Commercial Property

Australia is heating up - outside of the hottest decade on record, Australia's commercial property sector has become a hot bed of activity with foreign investors pouring in the dollars on some prominent commercial premises.

Top of the news winding up 2009, was South Korean National Bank's purchase of the Aurora Place Office Tower in late December for $658 million, which has been one of the most substantial deals for commercial property in Sydney as of late. Jones Lang LaSalle's Director of International Investments Simon Storry, who negotiated the deal, says the deal illustrates the international appeal of Australian assets at present. Major investors from Europe, North America and through Asia are turning their eyes on prime office space in Sydney, and other Australian commercial property markets, he observes.

Australia, of course, has come out of the Global Financial Crisis comparatively unscathed, which has attracted an onslaught of foreign investment. Private banks worldwide are setting up syndicates of their wealthier clients to create a strong arm to approach the emerging sector. And according to CB Richard Ellis, 2010 projections of foreign commercial property investment stand at $2 billion up from a total $1.6 billion in 2009, which includes the Aurora Place deal. And despite the strong Australian dollar and higher interest rates, international investment is still expected to reach a sustainable 20 percent, reports Business Weekly.

On the domestic front, property has been changing hands with some strong valuation. New Year's Eve saw Dexus Property Group selling its 50% interest in the Westfield Whitford City shopping centre in WA for $256.6 million to an affiliate of GIC Real Estate. Experts believe this and the Aurora Place deals are signals of the coming asset valuations for 2010.