Office tower sales are falling to a worrying level.Credit:Louie Douvis
In the last three months alone,the rate of sales across all sectors of office,industrial and retail assets collapsed by 61 per cent at a time when interest rates are high and listed managers are in the midst of finalising their full-year accounts.
The latest Australia Capital Trends report from MSCI Real Assets shows that sales were at the lowest level since 2011 for a second straight quarter. Deal count also dropped by close to half compared to the five-year average,while office sales fell below the retail sector and the build-to-rent/apartment market.
While there are many smaller assets being offered,big ticket deals such asthe long-awaited sale of Mirvac and Blackstone’s half stake in 60 Margaret Street/MetCentre in Sydney is still being completed.
Overall volumes haven’t seen declines of this magnitude since the slump induced by the Global Financial Crisis.
Ben Martin-Henry,head of Pacific Real Assets Research at MSCI
The sale of a half stake in Sydney’s tallest office building,the $2 billion Salesforce Tower overlooking Circular Quay,is also on pause with bids said to be about 10 per cent lower than were being asked.
One major sale was by Dexus of its 44 Market Street tower in Sydney at a 17 per cent discount to an overseas buyer. In Melbourne,12 interest rate rises by the Reserve Bank over the past 13 months has hit buyer sentiment,with just one $30 million office sale recorded this year.