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Just 160,000 square metres (sq. m.) of new and major refurbished supply is expected across Australia’s eastern seaboard markets of Sydney, Melbourne and Brisbane in 2018, representing less than 1.5% of existing stock. Of this space, the majority will be in Melbourne and has already been pre-committed. With business confidence in positive territory, we anticipate the uptake of stock to continue, despite limited availability in both Sydney and Melbourne. As a result, we expect vacancy to compress in all three markets, with Sydney forecast to be the tightest at approximately 3% by the end of 2018, the lowest level in over 25 years.

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Occupier demand in the CBD reached the highest in 11 quarters in 4Q17, bring ing the full year CBD net absorption to the highest in three years.

Residential market remained optimistic in 4Q17. Transaction volume pf strata units in the prime districts eased slightly 1-o-1 due to the year-end holiday period. 

Retail sales excluding motor vehicles recorded over two consecutive quarters of growth, likely a result of the seasonal timed sales.

Amid stable stock and as tenants physically moved into their new premises, the business park vacancy rate eased for the sixth consecutive quarter in 4Q17.

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The “Project of the Century” will provide enormous opportunities in the built environment over the coming decades

Over the last two generations, we have seen a familiar trend of rising wealth and influence in Asia. It started with the Japanese in the 70s and was followed by the Koreans in 90s and the South East Asian “Tigers” in the early 2000s. For the past decade, China and India have been among the powerhouses of world economic growth. Given their ambitions and scale, they are both likely to be important contributors for a very long time.

The Belt and Road Initiative (BRI) is one of clearest manifestations of China’s vision and influence. The infrastructure and investment underpinning the BRI will streamline trade flows and lift economic activity in much of Asia, the Middle East, and North and Eastern Africa. While the vision will bring huge opportunities for investors and developers, the BRI will also change the face of corporate China, which will have an enormous influence in the 21st century as Chinese brands become household names around the world.

This report aims to bring some clarity to the initiative, with Knight Frank’s research teams developing a Belt and Road Index to rank 67 countries according to a number of key criteria, along with local analysis from a significant number of BRI markets. Our analysis shows that opportunities are widespread, with improving bilateral relations between BRI countries and China providing potential for real estate investment, development and business expansion. No doubt the BRI will provide further impetus to corporate China’s growth and influence in global markets.

With this report, we are taking crucial steps in being able to provide the highest level of advice around tangible opportunities along the BRI. We hope you find the report useful and insightful.

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PRIVATE REAL ESTATE CONTINUES TO DELIVER FOR INVESTORS

Investors surveyed in June for the Preqin Investor Outlook: Alternative Assets, H2 2017 reported high levels of satisfaction with private real estate returns. The majority (95%) of respondents reported that the performance of their private real estate portfolios had met or exceeded their expectations over the past 12 months, and 91% felt that they had met or succeeded over the past three years. It is clear that investors have a generally favourable view of the asset class, with 44% reporting a positive perception of real estate, compared with just 14% that have a negative perception.

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