Two deals dominate the selected transaction sample
The five publicly reported transactions selected for this edition totalled $296.2 million. This is a curated sample, not a measure of total national transaction activity. Almost 94% of the sample value came from two deals: the $201.8 million acquisition of Four Points by Sheraton Sydney, Central Park by Hoi Hup Realty, and the $76 million sale of Karalee Shopping Village in Queensland.
Below these headline transactions, smaller commercial assets continued to trade. Reported sales included an $8 million commercial and development property in Braybrook, a $5.3 million retail and commercial asset in Belgian Gardens, and a $5.1 million showroom and warehouse in Cranbourne. The pattern suggests liquidity exists at several price points, although disclosed evidence remains limited and most transactions did not report a yield.
REIT investors favour retail
Retail property securities were the strongest part of our selected A-REIT group. Vicinity Centres rose 2.42% for the week and Scentre Group gained 1.14%. Mirvac and Stockland also advanced by more than 2%.
Performance was weaker elsewhere. Storage King Group declined 3.06%, Charter Hall fell 2.81%, and Goodman Group lost 1.33%. Across all 11 securities tracked by Prop Weekly, the simple average weekly price movement was a modest gain of approximately 0.24%.
The longer-term figures tell a more complicated story. Vicinity Centres recorded a three-year price CAGR of 10.75%, while Scentre Group recorded 8.72%. Centuria Office REIT and Dexus remain negative over one, three and five years. These are price movements only and exclude distributions, which are an important part of total REIT returns.
Office vacancies remain uneven
National office vacancy reached 16.1% in July, up 0.3 percentage points from January. Non-CBD vacancy was higher at 18.9%, compared with 14.9% across CBD markets.
The city results vary considerably. Brisbane recorded the lowest CBD vacancy among the markets tracked at 10.2%, followed by Sydney at 13.3%. Melbourne remained highest at 18.9%. Canberra experienced the largest deterioration, rising 4.5 percentage points to 14.7%.
Meanwhile, the RBA cash rate remained at 4.35%. The Australian economy expanded 0.4% during the June quarter, while the value of non-residential building approvals increased 14.4% in July to $9.93 billion.
What we are watching
Industrial land availability is emerging as a constraint in Brisbane. Research reported during the week suggests serviced industrial land could be exhausted within five years, with industrial outdoor-storage precincts already 96.87% utilised.
The central message this week is divergence: retail REITs showed relative strength, office conditions remained difficult, and transaction activity was heavily influenced by two large acquisitions. Capital is moving, but selectively.