The fundamentals of the Office Middle Markets have significantly shifted across the First Half of 2020, as the immediate effects of COVID-19 quickly took hold of Australia. Despite this, Australia’s Office Middle Markets remained resilient as office assets saw their capital values increase and yields tighten.
There were 35 transactions, totalling $1.24 billion in the Office Middle Markets space during the first six months of the year; a 53% decrease in transactions and a 44% drop in sales volumes over the same period in 2019. However, even with a notable reduction in sales volumes across the market, both CBD and Metro assets saw an increase in the average purchase price, this was particularly evident in the Metro market where the average price of an asset increase by 36% from $23,308,238 (2019) to $31,743,889 (2020).
Of the 35 transactions, 27 took place in the Metro Markets totalling $857.1 million, whilst 8 assets transacted across Australia’s CBD at just $387.6 million.
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