Unprecedented enquiry levels for Metro Assets in H1 2020

Colliers International has released its Office Middle Markets report, analysing the performance of commercial assets valued between $10 to $100 million around Australia.

Key findings are:

There were 35 transactions in H1 2020, totalling $1.24 billion in the Middle Markets space during the first six months of the year, which is a 53% decrease in transactions and a 44% drop in sales volumes over the same period in 2019 (Colliers International transacted 14 of the H1 2020 sales)

Of the 35 transactions, 27 took place in the Metro Markets totalling $857.1 million, whilst eight assets transacted across Australia’s CBD at just $387.6 million.

Despite a notable reduction in sales volumes across the market, both CBD and Metro assets saw an increase in the average purchase price, which was particularly evident in the Metro market where the average price of an asset increase by 36% - due to limited stock putting upward pressure on pricing. The average sale price for Metro assets in H1 2019 was $23,308,238, compared to $31,743,889 in the same period in 2020

Globally, office transactions were down 38% in the first half of 2020 when compared to the same period in 2019 - the impact was felt most strongly in the Asia Pacific region where deal volumes were down 55% over the same period 

Transaction activity was impacted most strongly in Asia, given it was the first region (globally) to be hit by the COVID-19 pandemic – as countries went in to lockdown, transaction activity started to slow when compared to the Americas and EMEA

Offshore sales were down from 14 to four (a 71% reduction) which can be attributed to the effects of COVID-19. It is worth noting that the five offshore purchasers all came from Asia, with the average sale price increasing from $48 million in the first half of 2019 to $71.6m in 2020.

Matthew Meynell, Head of Investment Services at Colliers International, commented “one constant in the first half of 2020 was the unprecedented level of enquiry, and capital still chasing Office assets. However, the flight to quality thematic is beginning to play out, as investors pursue strong covenanted assets, and forensically investigate tenant solvency and assets with long WALEs”.
 

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Matthew Meynell

Head of Investment Services | Australia

Sydney CBD

As the Head of Australia’s largest investment sales team, Matthew drives industry leading initiatives back by a team of professionals at the forefront of the industry.

His ability to identify trends in the market has seen him develop a strong proficiency in Middle Market Office assets, Offshore capital and complex workout solutions in the Restructuring and Insolvency space.

By empowering his team with the right expertise and market experience, Matthew has built specialised workforces within the Colliers business to generate revenue, deliver exceptional results and exceed client’s expectations.

Matthew’s investment into relationships sees him deliver enduring value to his team, clients and their business’ whilst mobilising the international Colliers offering to develop a collaborative and effective strategy.

By doing what’s right for his team, the greater Colliers business and his clients, he has established himself as an exceptional leader within the business and the property industry.

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