Real estate service provider CBRE has released its latest Capital Flows report, which has found that intelligent investment into the residential sectors is favoured in 2024 by Australian based investors.
These investors have indicated that their preferred sector remains industrial and logistics this year, according the CBRE Investor Intentions Survey. Capital values have largely remained stable in that sector, with yield softening being offset by elevated rental growth.
With very high rental growth and a lack of new supply, 23% of respondents are also targeting residential in 2024. The evolution of Build to Rent, Build to Sell and student accommodation are particularly favoured by investors, particularly upon reflection of its growth across the country in the last year.
Given the reasonable discounts to peak pricing offered, 21% of respondents have identified office as their preferred sector.
CBRE also found that higher return hurdles are pushing investors up the risk curve. Opportunistic strategies are preferred by Australian investors in 2024, given that higher interest rates have pushed return hurdles higher. Alongside this, Value Add and Core Plus are also popular, while about 19% are still targeting Core.
