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Improved investment outlook for 2021

Investment sales across the Office, Industrial, Retail and Hotels sectors, rebounded strongly in the second half of the year, due to Australia’s management of the pandemic.

Colliers International’s Capital Markets Investment Review found that despite the major disruption during 2020 due to the pandemic, the outlook for Australian property investment in 2021 is positive.

John Marasco, Managing Director, Capital Markets and Investment Services said, “Many major deals ground to a halt in March 2020, while investors and vendors assessed the impact the pandemic would have on income, in the short term and longer term.”

“However, the International Monetary Fund predicts that the Australian national economy, will bounce back more quickly, relative to other developed countries; national GDP rose 3.3% in the September quarter and NAB’s index of business confidence jumped by 9 points in November 2020.”

“These figures, coupled with Australian Consumer Sentiment hitting a 10-year high in December 2020, and a lower than expected unemployment rate of 6.8%, suggests the outlook for 2021 appears to be improving.”


Office sales volumes in the second half of the year were impacted due to the onset of the COVID-19 pandemic in March 2020, with only $1.76 billion of sales recorded nationally - down 64.4% from the corresponding period in 2019. Sales improved in Q4 with $4.52 billion of sales recorded in the quarter. 

Transactions in 2020 had an average sale price of just over $202 million, which was 27.4% less than the previous year.

Adam Woodward, Head of Office Capital Markets at Colliers International said, “We are still experiencing strong demand for office assets, particularly those that are well located with long leases in place. There is a significant weight of offshore capital looking for opportunities in the Australian office market, which we expect will boost transaction volumes well beyond the level in 2020.”

“Metropolitan office markets have been favoured by investors, accounting for a much larger proportion of the transaction volumes than last year at nearly 40%. It was almost an even split between metro and CBD volumes in Sydney in 2020, and Brisbane saw more activity in the metro markets than the CBD market.”

“The change in occupier behaviours and therefore their requirements is likely be to be a key driver in the next supply cycle, with adaptable buildings which provide the latest in health and hygiene facilities to be in high demand. The change in tenant requirements is likely be to be a key driver in the next supply cycle, with spacious buildings which provide the latest in health and hygiene facilities to be in high demand.”


The industrial sector has been brought to the forefront in 2020 and has outperformed all other mainstream real estate asset classes. This asset class accounted for 28.5% of investment volumes in 2020 (across office, retail and industrial), well above the 15.4% recorded in 2019.
Colliers Industrial Capital Markets Review found that Australian industrial and logistics assets remain well sought after, with $5.49 billion trading in 2020 - up 11.5% from the level recorded in 2019. 

The East Coast states captured 91.6% of investment volumes in 2020 as institutional groups look to capitalise on strong leasing fundamentals and favourable outlook for further yield compression in these states. 

“The strong level of investment recorded for the year has come off the back of robust fundamentals within the sector including e-commerce growth, food logistics and infrastructure investment, as well as a deeper pool of capital as new entrants to the market emerge,” said Gavin Bishop, Head of Industrial Capital Markets at Colliers International.

“Changing consumer preferences towards online grocery and food platforms in 2020 has resulted in strong occupancy demand from occupiers in the food subsector; these businesses have continued to perform well, with expenditure on food items rising by 11% since panic induced buying in March 2020, well above the 2.8%   recorded for the corresponding period in 2019.”

“The vendor profile has been under pinned by corporate groups, the bulk of which have been sold via a sale and lease back arrangement. Nearly 60% of assets traded stemmed from corporates, while circa 20% came from institutional vendors including Charter Hall and GPT.”


$4.26 billion in retail assets transacted in Australia throughout 2020, down 39% on the previous year and representing the lowest total transaction value for the retail investment market.

The highest level of retail investment activity in 2020 was recorded in the Neighbourhood sub-sector; 35 neighbourhood assets transacted for a combined total $1.50 billion equating to approximately 35% of the total retail investment market by dollar value.

Lachlan MacGillivray, Head of Retail Investment Services at Colliers International said, “In the early months of the pandemic, the implementation of the Code of Conduct for Commercial and Retail Tenancies had a substantial impact on rent collections for retail landlords.”

As a result of these risks, transaction volumes were impacted significantly during the second quarter – with deal-flow only starting to improve in the third and fourth quarters, as rent collections appeared to be recovering and most of the Code of Conduct requests were finalised.”

“Neighbourhood and large-format retail centres were favoured by investors for their stable income streams and accounted for over half of the sales in 2020.”

“Institutional investors were the most active purchaser group by dollar value, accounting for 52% of total retail transactions, a slight increase year on year from 41% in 2019.”

“We expect a significant increase in major asset transactions >$150 million in 2021. The return of stabilised trading conditions, complimented by attractive relative value return metrics and limited key opportunities will be a big market driver.”


An uptick in activity during the last quarter of 2020 saw hotel transaction volumes total just over $900 million for the year and with several larger deals still currently in play. Total annual transactions were well below the long-term average of $1.6 billion and the lowest annual transaction volume since 2008 and the peak of the Global Financial Crisis.

Colliers’ report found that deal flow has primarily comprised smaller assets being acquired by private investors with only two transactions above $100 million. The average ticket size averaged $34 million; a decline of 25 per cent compared to 2019.

Gus Moors, Head of Hotels at Colliers International said, “Closed international and state borders brought great uncertainty about future trading of hotel assets, which resulted in many investors adopting a ‘wait and see approach’ to investments.”

“Deals which did occur took longer to complete with a higher level of scrutiny from financiers and the Foreign Investment Review Board.”

“However, a quantum of transactions did occur during the second half the year which has led to greater price discovery in a post-COVID environment. The ongoing active role of foreign capital in Australia’s hotel investment market will continue to be crucial to underpinning valuations over the near term.”

“In 2021, we anticipate increased transaction activity in the second half of the year, as buyers and sellers formulate greater clarity around the future trading outlook, following the wind-back of government stimulus and the roll-out of the vaccine program both nationally and internationally.”

Related Experts

John Marasco

Managing Director | Capital Markets & Investment Services


I have been with Colliers International for over 25 years and am the Managing Director of Capital Markets & Investment Services, Australia as well as the State Chief Executive of Victoria.  

I have established a strong reputation in the Capital Markets space and have formed close relationships with major investors and institutions on a global scale. In recent years, I have negotiated some of Australia’s largest real estate transactions and have been instrumental in successfully brokering many substantial transactions with overseas investors entering the Australian market. My extensive connectivity in the global real estate market can unite capital with local expertise, regardless of location.

Our national Investment Services business represents market specializations including Capital Markets and Investment Sales. The two clear divisions servicing the Australian commercial office market ensures complete market coverage, efficiency and premium experiences and successes for our clients. 

​As a long standing senior member within Colliers International, I have played an integral role in contributing to the business's success in Australia. I hold a number of senior positions with Colliers including a member of the National Executive Board. I am committed to the success of the business by providing our people with the tools they require to deliver incomparable service and results.

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Adam Woodward

Head of Capital Markets | Australia


Adam is a highly motivated, well rounded property professional with proven experience in deal origination and completion of major property transactions across all investment sectors. Adam’s specific experience has been working in a transaction team for a major public and wholesale institutional investment business.

He is particularly focussed on achieving the best results for his clients, with his ability to drive and generate well balanced, cost effective and collaborative solutions.

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Gavin Bishop

Managing Director | Industrial


Gavin is the Managing Director of Industrial & Head of Industrial Capital Markets Australia at Colliers, where he has been specialising in industrial property for 21+ years. Based in the Sydney CBD Head Office, Gavin manages a highly successful team of over 120 staff across every state & territory nationally in key industrial and logistics precincts.

Gavin specialises in the national industrial capital markets and has excellent relationships across a broad spectrum of institutional, international and private investors. Over Gavin’s time with Colliers, he has completed hundreds of deals in industrial property, settling over $14 billion in his career to date, and leasing over 400,000sqm. Gavin enjoys a 75% market share of industrial capital markets share in NSW.

Gavin has worked extensively in the sale of industrial portfolios of up to 30 assets in one portfolio. Gavin and his team have sold 24/34 of all industrial portfolios in Australia over the last five years, including the AMP Portfolio ($105m), J.P. Morgan Portfolio ($250m), Altis Portfolio ($342.5m), Qantas Portfolio ($802m) and GIC/Australand Portfolio ($1.073b).

Some major distribution centre sales that Gavin and his team have been involved in over the last two years include, the Calibre, Eastern Creek ($130.1 million), 1 Eucalyptus Place, Eastern Creek ($90.5 million), 3 Roberts Road, Eastern Creek ($253 millions) and 6-20 Clunies Ross Street, Greystanes ($76.6 million)

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Gavin is a long-standing member of the Colliers team, having joined in 2000 as a graduate valuer. Gavin commenced with Colliers as part of their Scholarship Program and he was fortunate to work across multiple service lines and locations across Sydney, before settling in the Industrial team in Sydney South in 2001. Over the last 20 years, Gavin has progressed through the industrial business including managing the Sydney South and Sydney South West offices, before moving into the NSW State Product Director for Industrial in 2010.

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Lachlan MacGillivray

Managing Director, Asia Pacific | Retail Capital Markets


Specialising in the sale of major shopping centres, Lachlan has managed the sale of over $15 billion worth of shopping centres, working with a wide range of clients including institutional, international and private investors.

In 2021, Lachlan’s team transacted the largest retail deal in Australian history, with the sale of Pacific Fair and Macquarie Centre for $2.2 billion. This deal represents the largest retail transaction globally since 2018. He also secured the second largest agency retail transaction in Australia at $1.00 billion in the sale of Pacific Werribee and Pacific Epping.

In 2019, Lachlan's team transacted 83% of all retail assets greater than $100 million, equalling a total of $3.58 billion in sales. These included:
• The sale of Westfield Marion, SA for $670 million (50% interest);
• The sale of Westfield Burwood, NSW for $575 million (50% interest);
• The sale of Garden City Booragoon, WA for $575 million (50% interest);

In the last 5 years, Lachlan has sold 8 out of the 9 Australian regional shopping centres that were presented to market, and has successfully marketed over 100 different assets. Lachlan has achieved the largest individual transaction in Australian history with the sale of Indooroopilly Shopping Centre, QLD for $810 million (50% interest). 

With an in-depth understanding of shopping centre performance, Lachlan can provide you with expert advice on the sale and acquisition of all your retail investment:

• Capital Partnering / Joint Ventures / Portfolio Transactions
• Asset Marketing and campaign strategy, implementation and execution
• Shopping centre acquisition and disposal
• Sale negotiation and transaction
• Strategic asset positioning and repositioning to maximise asset performance
• Buy side investment advisory

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Gus Moors

Head of Hotels | Australia


Having joined Colliers in early 2014, I have subsequently sold over $180 million of hotel assets across Victoria and NSW, including the largest hotel transaction in Victoria since 2008, being Bell City Preston for $143 million.

Prior to joining Colliers, I was Director of Asset Management for Tourism Asset Holdings Limited (TAHL), Australia's largest hotel owner and responsible for selling down this portfolio totalling over $1.5 billion.

Before TAHL, I was with Jones Lang LaSalle Hotels for 7 years, as Head of Asset Management and Chief Operating Officer for the Hotels group across Asia Pacific.

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