Low rates fuel ‘explosion’ of property deals

Lower interest rates are set to fuel more complex and creative property deals at record prices as asset-starved investors target companies in areas such as healthcare, food production, logistics and even not-for-profit sectors that are looking to offload real estate from their balance sheets. One of the biggest deals to round out 2019, Charter Hall’s pre-Christmas acquisition of $840 million worth of BP fuel and convenience retail properties, has set the scene for more large-scale portfolio sales. The flood of capital into real assets is forcing discerning buyers to look beyond the traditional scope of property deals to satisfy demand. The economists of all four big banks expect the RBA to cut the official cash rate to a record low of 0.5 per cent in February, which could trigger an even bigger rush into Australia’s commercial real estate market.