For some time, Asian investors have shown a growing interest in the Australian commercial real estate market, attracted by its stability, resilience, and potential for long-term growth. They prioritise generational assets, aiming for properties that offer not only immediate returns, but also the potential for sustained growth and wealth preservation across many generations.

Our transactions back up the strong demand from this investor group. In 2024 alone, Asian investors have purchased 60% of our premium investments, highlighting their significant presence in the market.

Australia presents ample opportunities for robust growth and aligns well with the three key priorities of Asian investors.

Firstly, Asian investors look for land size and value, foreseeing future appreciation, and aiming for intergenerational wealth accumulation. Their motivation is to provide a generational asset, with their children’s future in mind.

Secondly, they value blue-chip tenants with a proven track record, often nationally recognised, and listed on the ASX, to ensure stability and consistent returns.

Lastly, they gravitate towards trophy locations, placing high importance on prime, prestigious settings that symbolise success, and offer long-term growth potential.

With a strategic focus on defensive and generational assets, these investors are reshaping the landscape of commercial property ownership across various sectors, including fast food, health, childcare, government, convenience retail and large format retail.

The health, fast food, and childcare sectors in particular have long been regarded as defensive assets, known for their resilience during economic downturns and consistent demand regardless of market conditions.

Asian investors know their worth and will pay a premium price for the quality.

As an example, we recently sold a number of assets for strong prices including a medical property in Dandenong which transacted for $11.68 million, reflecting a sharp yield of just 3.55 per cent.

The quality of the tenant was a significant factor in the firm yield. Monash Health is one of the largest health providers in Victoria occupying 40 locations, providing care for over 3.6 million incidents within the community annually.

The fully leased medical facility features a brand new 20-year lease to Monash Health until 2044, with five further 15-year options extending to 2119.

We also sold a Guardian Early Learning Centre in Box Hill for $9,999,800 showing a yield of 5.3 per cent while a health asset in Richmond sold under the hammer for $24 million – a substantial and rare price for an auction.

Investments in health and childcare facilities are driven by demographic trends, including an aging population and increasing demand for quality healthcare and early childhood education services.

Government-tenanted properties and large format retail centres are also favored by Asian investors for their stable income streams and long-term lease agreements. These assets offer the security of government-backed tenancies and the resilience of anchor tenants, making them attractive options for risk-averse investors seeking income certainty and capital preservation.

Investing in Australian commercial real estate offers Asian investors a compelling opportunity to build defensive and generational asset portfolios across key sectors.

By focusing on sectors with stable demand, long-term growth potential, and defensive characteristics, investors can navigate market uncertainties and achieve sustainable returns over the long term.

Burgess Rawson market updates & insights:

Automotive assets: a high-octane investment choice for sustained growth and resilience - Burgess Rawson | Commo.

Scaling Up: The Rise of Large Format Retail – by Yosh Mendis Burgess Rawson – National Partner | Commo.

Why Investing in Australia's convenience retail sector is proving lucrative - Burgess Rawson | Commo.

Unveiling the Dynamics of the Fast Food Revolution - Burgess Rawson  | Commo.

Early education listings up by 22% as Burgess Rawson reaches $2.2 billion milestone | Commo.

Burgess Rawson News: 

Burgess Rawson first 2024 Auction Event records $66.79 m  | Commo.

Guardian Early Education Centre Banksia Park sold for $6.4 Million - Burgess Rawson & RWC  | Commo.

Burgess Rawson launches its second major commercial property portfolio event for 2024 | Commo.

Burgess Rawson promotes Yosh Mendis to National Partner | Commo.

By Zomart He – Burgess Rawson, Partner – Asian Investment Services