The Property Council/IPD Australia All Property Index has posted its highest total rate of returns in over two years, indicating that the robust growth seen over the past several quarters is continuing.
The results show a total return of 9.9 per cent for the year ended September 2014, made up of a 7.1 per cent income return and a 2.6 per cent capital return.
The total is the highest level recorded by the index since June of 2012. It marks an increase of 60 basis points over the same period one year ago and an increase of 20 basis points over the preceding quarter.
The Property Council/IPD Australia All Property Index is made up of 1354 assets with a combined value of approximately AUD$140 billion.
The index provides a broad measure of returns on investment for commercial property in Australia.
Returns by property sector
The industrial sector was the leading performer in the Australian market, with returns of 11.4 per cent. Retail and office followed, with returns of 10.0 and 9.3 per cent, respectively.
The industrial sector has stood out for the past year with a year-on-year increase of 100 basis points.
In the third quarter, results for industrial property dropped compared to the previous one. They have declined by 50 basis points in comparison with June’s results.
The office sector results for Australia’s most highly-populated cities (Sydney and Melbourne) posted gains compared to the same period one year ago.
The retail sector saw an increase in returns in the face of the strong performance of smaller shopping malls servicing regional areas and neighbourhoods.
The strongest performance was noted in the higher populated areas of the country’s eastern seaboard.
