ANZ Capital Markets Investment Review 2021

Retail

2020 was a disruptive and challenging year for retailers and landlords alike.

A total of $4.26 billion in retail assets transacted in Australia in 2020. This is down 39 per cent year on year and represents the lowest total transaction value for the retail investment market since 2011.

Despite this, certain sub-sectors were largely unaffected – seeing significant demand and transactional activity.

Industrial

Despite challenging economic conditions, 2020 was a strong year for the Australian industrial and logistics market as several cyclical and structural tailwinds positively impacted the sector.

$5.49 billion traded in 2020 across the sector, up 11.5% from the level recorded in 2019. Notwithstanding this strong result, a 26.9% fall in the number of assets to trade was recorded over the same period.

Office

The fundamentals of the Australian property market remained solid throughout 2020. This was been underpinned by a stellar economic performance during the pandemic, with the outlook looking like a V shaped recovery.

After a record year in 2019 sales activity reached $9.953 billion during 2020. Transaction volumes were significantly disrupted in the second and third quarters, however the fourth quarter started to see a return to normal, with a sharp increase in enquiry and transactions.

Hotels

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.

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.