Global private equity firm Forum Partners has earmarked Australia as one of its growth centres, and plans to double its exposure across mixed-use and residential assets to about $500 million in the next three years.
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Russell Platt, the London-based co-founder and global chief executive of Forum Partners, a $US4 billion global private equity real estate firm, said the group will target a range of sectors that offer core-plus and value-add capabilities.
The group has about $250 million in several sizeable investments in Australia, including an exposure to a diversified portfolio, including its latest deal, in Adelaide, which will include a new hotel to be operated by Starwood's Aloft brand.
"Forum prefers to co-invest in assets and has a good relationship with Denison Property, among others," Mr Platt said on a recent trip to Australia.
"There is a lot of money in the Australian superannuation funds, which we want to tap into and provide advice and assistance for that cash to be invested overseas."
Mr Platt said good-quality B-grade office properties provide growth potential as they can be refurbished and gain good rental returns.
"Real estate needs to work harder and smarter to get better returns and we plan to make our assets work," Mr Platt said.
He added that with new avenues of cash being available, such as crowdfunding, the demand for good quality assets is rising.
"We are positive about the outlook for Australia, where we see the office leasing sector improving and the high demand for residential is expected to continue for some time. We don't think interest rates will rise in Australia in the next year or so," Mr Platt said.
According to JLL, the Sydney CBD office market is also in a cyclical upswing and has recorded 99,500 square metres of net absorption over the past 12 months.
A new JLL Research report says professional services are the locomotive of employment growth and the take-up of office space in Sydney.
The report says professional services employment has increased by 7 per cent between 2007 and the first quarter of 2015. However, it is not the traditional sub-sectors of legal and accounting that are supporting growth, but computer system design and related services in the technology sector.
JLL's NSW head of office leasing, Daniel Kernaghan, said Sydney is benefiting from the expansion of home-grown technology firms and multinational companies listed on the NASDAQ stock exchange. "Recent new entrants into Australia include Twitter and Intuit, while LinkedIn and Atlassian have increased their footprint in Sydney over the past 12 months," Mr Kernaghan said.
The banking sector is still strong, with the Commonwealth Bank said to be looking at the space in Darling Park being vacated by PwC, when it moves to Barangaroo South in 2017.
