Asian buyers invest in Sydney’s suburbs
25 January 2019
Chinese and Hong Kong-based buyers are pouncing on investment opportunities in Sydney’s metropolitan markets.
Savills Australia’s Metropolitan & Regional Sales team has witnessed a resurgence of Asian capital in inner-city and city-fringe suburbs, such as Haymarket, The Rocks and Milsons Point, transacting more than $47 million of property in November and December.
“With five out of our past six deals at the end of last year secured by mainland Chinese and Hong Kong buyers, the sentiment is that this will continue in Q1 2019,” NSW State Director of Metropolitan & Regional Sales, Tom Tuxworth, said.
“The Chinese buyer mandates we are currently dealing with are not reliant on local funding, and buyers have the ability to purchase with cash and settle quickly.”
Recent Savills sales to Chinese, Singaporean and Hong Kong buyers (respectively) include 19-23 Post Office Street, Carlingford, for $22.6 million; suites two and three at 175-185 Gloucester Street, The Rocks, for $7.8 million; and 1/88 Alfred Street, Milsons Point, for what industry sources believe to be circa $6 million.
“In another deal, the buyer of the 7/11 at 869 George Street purchased within 24 hours of inspection, with little hesitation about the investment fundamentals of the Sydney CBD,” Mr Tuxworth said.
“These buyers are attracted to good quality properties with well-known tenants in Sydney’s metro locations.”
Mr Tuxworth went on to say that his team had observed a phenomenon contrary to the media noise surrounding the withdrawal of Asian capital from, and subsequent slow-down of, the commercial property market.
“Sydney is still high on the agenda for offshore buyers who believe there is strong capital and rental growth,” he said.
“Asian buyers in particular assess value differently from local buyers, who are currently more risk-adverse and reliant on local funding.
“While the number of buyers engaging in these properties has declined since 2015, there are a number of new and established players in the market looking for well-located investments.”
Sales executive David Hickey confirmed this notion, saying Sydney was “still a favourite of global investors” due to its relatively high returns and perception as “a safe-haven play”.
“Buyer competition helps sustain pricing, while low vacancies and growing demand suggest rents will continue to rise,” he said.
The Savills Asian Services Desk recorded a resurgence of new offshore buyer enquiries during Q4 2018, highlighting the availability of offshore capital seeking premium opportunities in NSW.
“Market fundamentals remained robust in 2018, with transactions during the year at record levels, which was aided by strong prices, rental growth and unprecedented private offshore capital looking for prime Sydney metro properties,” Mr Hickey said.
