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Australian shopping centre deal...

Australian shopping centre deals dominated by foreign investors

Foreign investment in Australian shopping centres is on the rise and now accounts for more than half of the total number of deals made. 

This is according to the findings of new data from commercial real estate group CBRE, which specified that offshore investment grew significantly in the second quarter of 2016. 

As such, it represented 51 per cent of all transactions for the period - and the group's latest Retail Marketview research report specified that strategic retail investments seem particularly attractive to foreign investment. 

Danny Lee, CBRE's senior research manager for Australia, said investment is now well over the levels seen in 2014 and 2015, when it made up a comparatively small 13 and 14 per cent of total transactions respectively. Mr Lee said this is a testament to ongoing confidence in this particular sector.

CBRE national director of retail investments Mark Wizel said foreign buyers have historically focused on core central business district (CBD) assets, but are increasingly venturing into other markets. 

"This is primarily due to the lack of available stock currently on the market in prime CBD locations, which is driving investors to target alternative assets, including regional, sub regional and neighbourhood shopping centres," he commented. 

Vicinity's $841m divestment of four centres over the past quarter is exemplary of this trend, as three of these centres were acquired by the Blackstone Group - an American investment firm. 

According to the CBRE report, there was also a significant uptick in investment across the broader retail sector, as retail property investment transactions increased significantly to $3.1 billion in the second quarter of 2016 - a significant increase on the first quarter's corresponding figure of $0.7 billion.

"Australian retail is being viewed as a relatively secure investment for offshore purchasers, underpinned by consistent growth in retail trade, with a 3.5 per cent increase in Q2," Mr Wizel remarked. 

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