Confidence Continues to Rise in Australia Real Estate, Debt Strategies Remain Attractive in Low Yield Environment
Office occupancy rates in Adelaide were steady at 69 per cent in February, showing support that the office market is slowly regaining its health.
Office occupancy rates in Adelaide were steady at 69 per cent in February, showing support that the office market is slowly regaining its health. This has prompted major developers to commence construction on some of the biggest office projects in the South Australia city.
Elsewhere in Sydney, housing prices have reached all-time highs on the back of record-low borrowing rates, an improving economic outlook, an under-supply of listings and government incentives.
Read also: Investing in Australian Residential Real Estate
In the midst of the record-low interest rate environment, AllianceBernstein has successfully closed on its $900 million debt fund, offering attractive yield premium relative to public credit. Commercial real estate fundraising has been occurring at a brisk pace since the pandemic-induced stimulus flushed the markets with liquidity.
Meanwhile, in Hong Kong, both property developers and the government are looking to repurpose hotels in the city, where apartments are in short supply.
What caught out eyes this week?
Confidence Builds in Adelaide Office Sector
The Urban Developer – Charter Hall and Cbus Property are commencing construction on some of the biggest office projects in South Australia with occupancy rates and pre-committed tenants boosting confidence in the market. According to the latest Property Council of Australia survey, office occupancy rates in Adelaide were steady at 69 per cent in February.
New $900M Fund Targets Transitional Real Estate
GlobeSt.com – A new fund has entered the fray, offering to originate floating-rate first mortgage whole loans secured for transitional US commercial real estate. AllianceBernstein announced that it completed the first closing of its fourth US Commercial Real Estate Debt fund, which has secured nearly $900 million in capital commitments. Equitable will be the lead investor.
Read also: Atlanta, a Thriving Metro with a Profusion of Opportunities
Sydney housing boom lifts prices to a record high
The Business Times – Sydney housing prices soared to an all-time high, gaining 5.7 per cent since last year's low in October as the economy continues to recover. Sydney property values are now higher than the prior peak in 2017. The rapid gains have been fuelled by record-low borrowing rates, an improving economic outlook, an under-supply of listings and government incentives.
Read also: Brisbane Riding on Cyclical and Structural Tailwinds
Hong Kong turns empty hotels into apartments for residents
The Business Times – Hotels in Hong Kong are being transformed into residential developments to satisfy housing demand as the pandemic-hit tourism industry shows no signs of recovery. Property developers and the government are both looking to repurpose hotels in the city, where apartments are in short supply.
Will remote work really function long term for financial institutions?
JLL – President Joe Biden’s plans to reinstate Wall Street oversight remains a major focus as his appointed regulators await senate confirmation. This has many banks wondering whether flexible work from home policies, implemented out of necessity during the pandemic, will survive a potential era of increased regulation, which was scaled back during the previous administration.
Read also: An Analysis of COVID-19’s Impact on Office Real Estate Demand
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