Commercial property investment market in a recovery phase
The Property Council/IPD Australia Property Index has confirmed that the commercial property investment market is in a recovery phase.
It revealed that the Australian commercial property market recorded a total return of -2.2 per cent for the year ending December 2009, comprised of a 7.4 per cent income return and -9 per cent capital return. This represented an improvement on the total return for the year to September 2009 of -4.9 per cent.
The managing director of IPD Australia and New Zealand, Dr Anthony De Francesco, said the December quarter figures reaffirmed that the commercial property markets had reached a trough in the property investment cycle in mid 2009 and that the markets were now in the early phase of a recovery cycle.
"However, the recovery profile would be moderate rather than sharp," he said. "Importantly, against this backdrop we should see increased investment activity as market players continue to reposition their investments for the next upswing."
The index showed that the annualised total return for the retail, industrial and office sector indices were 0.3 per cent, -4.7 per cent and -5.3 per cent respectively.
The index report also noted that Australia fared better than the US and UK.
"A look at most economic indicators for the US, UK and Australia quickly illustrates the comparative strength of Australia for property investment," De Francesco said.
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