Commercial property

Asian investors are back and buying commercial property

Mr. Tong added that wealthy Asian investors have a 50% stake in the portfolio’s eight assets.

Asian investors also bought two child care centres, including a long-leased Little Locals operation in Auchenflower, Brisbane, for just over $11 million, representing a yield of 4.5%.

Mr. Tong said pre-pandemic Asian investors were certainly active but generally managed their assets remotely, staying in their home countries.

That changed after the pandemic, Mr Tong said, with many of the latest Asian investors planning to set up shop in Australia.

“Now that the borders have opened up, there’s a lot more capital flowing in and out of the country,” Tong said.

“Demand levels have definitely increased and as a result of this we are seeing an increase in bids and potential purchases from buyers from Asia.

“Traditionally it’s always been China, but we’re seeing a lot more capital from Vietnam, Singapore, Malaysia and Hong Kong coming into the country, that’s for sure.”

As in the past, Asian investors are drawn to Australia’s stability and perceived security, which Tong said has been bolstered by the government’s handling of COVID-19.

“It’s not like the days when you saw a lot of people come from overseas, put some money in and go back where they came from,” Mr Tong said.

“A lot of these Asian groups come to invest in Australia because they plan to settle the family there for the long term.

“They’re buying houses, sending their kids to school here, so it’s not a one-time investment for them.”

Burgess Rawson’s Billy Holderhead said Asian buyers were also present at his portfolio auction in Melbourne on Wednesday, where 16 out of 21 properties sold for a total of $67 million on a mixed yield of 5.03 %.

The highest price paid was $16.202 million for a Bunnings at Mount Isa after the eventual owner tried to blast other bidders with an opening bid of $15 million.

His bet failed, but he ended up buying the property with a final offer of $2,000. The other big hit, Mr Holderhead said, was a sports hall in Noble Park, Melbourne, which brought in $6.7 million, with assets earning 3.76% due to the generous size of the grounds .