Office market yields in Australia Q1 2021, by city
What is office yield?
In terms of commercial property, the yield represents the expected return on investment on a property. For investors, this is an important value as it indicates future income on an investment. Yield can be based on a property’s market value, annual income, and running costs. Capital growth, however, is not included in the calculation. The office yield was the lowest in Sydney. The vacancy rate in the CBD office market was also the lowest in Sydney compared to other major Australian cities.
Growth in the office segment
In 2019, Australia showed strong growth as a destination market for cross-border commercial real estate investment inflows in Asia Pacific. In the same year, transaction volumes reached a high in the office segment, with this segment also accounting for the highest share of foreign investment in commercial property. In addition, megadeals (greater than 400 million Australian dollars) reached a peak, solidifying the importance of the office segment in the commercial real estate industry in the country.