A-REITs with Perth and Sydney office exposure well placed

Perth and Sydney CBD office values are rising faster than in any other major capital city market, according to capital growth analysis of office assets held by listed property trusts (AREITS) by Goldman Sachs.

Perth (4.1%) appears to have been the strongest  office market for capital growth, followed by the Sydney CBD (2.6%) and the Brisbane CBD (2.4%) with offices in the Melbourne CBD (+2.4%) also showing above average growth.

Outside of the major capital city CBD office market, capital growth is less in evidence, with office values in the non-CBD Brisbane market down 6.1% and Canberra office values down 1.3%, with both of these markets achieving negative capital growth on both a simple and weighted basis.

Growth office values was weak outside of the Sydney CBD with non-CBD values up just 0.5%

“One point we will make on this analysis is that Sydney and Melbourne are typically viewed as 'core[ markets by the A-REITs.

“Consequently they represent the greatest exposure for each REITs office portfolio in dollar value terms,” says Goldman Sachs analyst and report author Peter Zuk.