Australian commercial property assets are expected to remain attractive to investors despite "soft market fundamentals", new research reveals.
The December quarter ANZ/Property Council Survey reported that the commercial property market sentiments had increased, despite high tenant incentives and elevated vacancy rates across the country.
The survey reported that "solid foreign and domestic investor demand" was driving downward pressure on cap rates despite the soft market fundamentals.
"While the likelihood of higher interest rates will challenge investor appetite for commercial property going forward, solid global capital flows, a heightened appetite for yield and strong foreign demand for Australian assets are likely to support investor interest in Australian commercial property for some time yet," the survey's authors said.
