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Perth among top 10 fastest growing cities
Tuesday, January 31, 2012
PERTH has been identified as one of the fastest growing cities on the planet in terms of gross domestic product (GDP) as cities nationwide lift their investment profile, according to Jones Lang LaSalle.
However it was Queensland’s burgeoning capital, Brisbane which topped the list of the world’s 20 fastest growing new cities in terms of GDP, with Perth ranked eighth.
A new report by JLL reveals that more than half of all global real estate investment resides in 30 cities, with Sydney and Melbourne ranked at 16 and 21 in terms of investment flows through 2010 and 2011.
And despite European economic turmoil, London has remained the top real estate investment pick with more than $43 billion invested in 2010 and the first three quarters of 2011, a third higher than the world’s second most popular destination, Tokyo.
JLL research and consulting analyst WA, Hugh Peacock described the medium term GDP forecast for WA as conservative when compared to Australian Bureau of Statistics figures for the last 20 years of just over four per cent.
“We have a strong ‘in-ground’ resource which in the short term comprises projects like Stage two of the City Square and Bishop’s See sites along with 396 Murray Street,” he explained.
“In the medium term there is the Perth waterfront and Perth City Link projects which are expected to see combined private investment of just over $5 billion.
“However, the challenge will be for developers to obtain pre-commitments of between 50 and 60 per cent for new projects.”
Jones Lang LaSalle believes that the market is capable of absorbing between 165,000sqm and 180,000sqm of office space over the next three years, though existing pre-commitment constraints will temper the process and thus the CBD’s low vacancy rate is likely to remain until the latter half of this decade.
“Australia is once again shown to be a leading destination for real estate capital,” Stephen Conry, CEO of Jones Lang LaSalle Australia said.
“What these global transaction numbers reveal is that during 2010 and the first three quarters of 2011, Australia was punching above its weight in terms of real estate investment considering the size of our market. Of particular note is the strong interest shown by offshore investors in the Australian market. Over the past two years, one third of all office sales in Australia have been to offshore investors.
“The trend is not, of course, confined to office markets. Australian commercial real estate volumes were strong in 2010 and held up well in 2011 despite the volatility in global financial markets.
“What the report also reveals is that Brisbane has been identified as the fastest growing city with a mature property market in the world in terms of GDP, with Perth ranked number 8 in the global rankings. The resources boom is surging these two cities ahead globally.
“Australia increasingly is viewed favourably by global investors assisted by the fact that we have the most transparent real estate market in the world.”