澳大利亚首都展望2025年6月

Capital markets are growing more confident that valuations havereached a cyclical low. Transaction volumes have continued to rise,establishing baseline prices that will help unlock further investmentactivity in 2025. ALISTAIR READSENIOR ECONOMIST, RESEARCH & CONSULTING Growth in Q1 volumes y/y Investment volumes in Q1 Private capital most active Total investment volumes rose by 26%in Q1 2025 compared to Q1 2024. Total investment volumes reached$9.3 billion in Q1 2025 with improvedinvestor sentiment. Private investors have been the mostactive, accounting for 32% of totalacquisitions in 2024 and 2025. National prime office yield Further reduction in cashrate by end 2025 Forecast GDP growth The weighted Australian prime officeyield stabilised in Q1 2025 at 6.7%. Thismarks the first time yields have notrisen since Q1 2022. GDP growth is forecast to graduallyaccelerate to an average rate of 2.4%from 2025 to 2030, just below the 20-year average of 2.6%. The market is currently pricing inafurther 0.7% fall in the RBA cash rateby the end of 2025. Investment volumes rose by 16% to $43.9 billion in 2024with improved investor sentiment. Investment activitywas strongest for industrial ($13.3 billion) assets asinflation and interest rates led investors to prioritiseassets with the strongest near-term outlook for rentalgrowth. The interest rate cutting cycle has continued globally,providing investors with increased confidence thatvaluations are at a cyclical low. As a result, a wide range ofgroups are now looking to deploy capital in the near-termto take advantage of an attractive entry point andmaximise the prospect of long-term capital growth. Thishas led to a pick-up in demand for prime product in thecore office, industrial and retail sectors, where investorsare able to deploy capital more quickly. In this regard, therecovery in deal flow in Australia has been highlysynchronised with the recent recovery Europe and theUnited States. This strength continued into Q1 2025 as investmentvolumes reached $9.3 billion, but activity has broadenedto include greater activity in office and retail markets.Although Q1 is typically the weakest quarter fortransactions during the year, several large office sales inSydney underscored the improvement in investorsentiment. These sales included 135 King Street for $670million toDaibiru and 20 Bridge Street for $270 million toAnton Capital JV PGIM Real Estate. At the same time, many are still seeking to deploy intoless liquid alternative sectors, particularly build-to-rent,student accommodation and data centres, but thesestrategies will take longer to execute. As the year goes on,improving liquidity and prospects for further cuts ininterest rates will continue to unlock capital markets andwe expect the current momentum to be sustained. Meanwhile, strong retail volumes reflect the settlement ofboth Westpoint Shopping Centre for $900 million toHaben/Hines and the GPT’s $300 million acquisition of a50% stake in Cockburn Gateway. After an extended period of inactivity, US investorsreturned strongly in 2024, accounting for $5.0 billion ofacquisitions. Japanese investors remained a key influenceon the Australian market, acquiring $2.8 billion of assets. Private and cross-border capital led purchasing activity in2024 with $17.2 and $13.6 billion in acquisitionsrespectively. However, offshore investors demand wasnarrower than normal, with substantial demand fromJapanese investors but relatively subdued demand fromSingapore, the United States and Canada. Cross-border investment has risen further in Q1, with USinvestors again driving much of the activity. Major Q1transactions included Bentall Green Oak acquiring the 10-20 Bond Street for $590 million, Hines 50% share in the$900 million acquisition of Westpoint Blackdownshopping centre, and PGIM’s joint venture in the $270million acquisition 20 Bridge Street. Japanese investmentalso remained robust, demonstrated by Daibiru’spurchase of 135 King Street for $630 million. The trend of private and cross-border investors buyingand REIT/listed capital selling has continued in Q1 2025,but demand has broadened with a wider set of investorsreturning to Australian shores. Meanwhile, A-REITs continued to be net sellers of assetsin Q1. For some time, REITs have been less active thanother buyer types, selectively divesting assets torecalibrate their investment strategies and fund newdevelopment. As market conditions improve, we expectrenewed participation on the buy-side, but recentvolatility in equity prices may delay their return. US investment has been spurred by the extent of thecorrection in core asset values, in addition to a strong USdollar and falling interest rates throughout 2024 whichimproved the attractiveness of the Australian market.Similarly, relatively low interest rates and a stronger Yenhave supported sustained Japanese demand. Yields have stabilised for both prime office and industrialassets across most of Australia afte