By Dexus Research 24 April 2018

Investors benefit from an extended cycle

Dexus Research today released its Australian Real Estate Quarterly Review Q2 2018 with the focus this quarter on the positive investment climate being experienced by commercial property investors.

Peter Studley, Dexus General Manager, Research said: “Real estate remains in a ‘sweet spot’ where positive occupier demand and a relatively steady cost of capital continue to support investor returns.

“Unlisted property rewarded investors with a higher return than both equities and fixed interest investments over the year to March 2018, delivering a total return of 12.7%.

“Office funds provided the highest return with 15.0% for the year, followed by retail with 12.0%. Industrial and diversified funds also delivered double-digit returns.

“Office returns are being supported by strong rental growth in Sydney and Melbourne which is leading to solid capital gains.

“Business confidence and consumer sentiment are both above the average of the past three years which bodes well for occupier demand.

“Capital markets are relatively stable, with bond yields and borrowing costs remaining at historically low levels.

“These factors are extending the property cycle.

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