Australia & New Zealand real estate investment themes for 2022

Real estate investment markets rebounded strongly with transaction volumes reaching an all-time record high in 2021. The industrial & logistics sector was a major contributor to overall volumes as investors seeking to increase their allocation to the sector were highly competitive for available assets. We also saw improved liquidity in the office sector, while retail transaction volumes in 2021 were well above 2020 levels.

The investment decision-making process typically considers six idiosyncratic risk factors – location, asset characteristics, covenant, weighted average lease expiry (WALE), capex requirements and rent profile relative to market. In 2021, we saw greater liquidity for assets with shorter WALEs, a sign of confidence in the domestic economy and recovery in occupier demand in the office and retail sectors.

In this paper, we have considered the five key investment themes and opportunities that will influence the Australia and New Zealand real estate markets. These themes will be at the forefront of shaping real estate investment strategies for 2022.