Australian Real Asset Review Q4 2024

Key trends include:

1. Substantial lifts in commercial real estate and infrastructure deal flow

After a quiet year, deal flow in both commercial real estate and infrastructure markets is up significantly compared to this time last year as investors respond to an apparent peaking of the global interest rate cycle and have greater confidence that the headwinds facing real asset valuations are abating. In the past six months, commercial real estate transaction volumes were up 18% compared to the same period last year and the average size of transactions is up 60% this year so far, compared to 2023.
In the infrastructure space, the value of deals in the six months to Q3 2024 was around double the same period last year at US$5.6 billion. The average size of transactions also increased, indicating greater investor confidence. Dexus anticipates an even more favourable market for infrastructure M&A opportunities once interest rates begin to fall with infrastructure investors likely to allocate back to core assets as the returns become more attractive.

2. Shopping centres are now outperforming other sectors

After years of underperforming, retail (shopping centre) portfolios are now outperforming other sectors as relatively high yields and improving rents and occupancy flow through to valuations.

Click here to read the report