News

Australian property returns rebound

NON RESIDENTIAL • August 20, 2021
Tags: RESEARCH

The latest Property Council/MSCI Australia Annual Property Index posted an annual return of 7.8 per cent, driven by the industrial sector’s strong performance.

Three key takeaways

  • The 7.8% total return was the highest since the third quarter of 2019, underpinned by an income return of 5.0%
  • Capital growth, at 2.7% per annum, returned to positive territory for the first time since the first quarter of 2020
  • On a quarterly basis, the index’s All Property total return was 3.0% for the second quarter of 2021 – the fourth consecutive quarter of positive return and the best quarter since the final quarter of 2017.

 

“Unsurprisingly, industrial was the top performing sector with an annual return of 23.2 per cent.” MSCI Director Mitchell McCallum states.

 

The office sector’s net operating income yield has held firm over the course of the last four quarters, with capital growth remaining in positive territory. McCallum does note, however, “some divergence” within the sector as non-CBD offices outperformed CBD assets.

Return by Sector, June 2021

 

Retail property’s relative underperformance continued with its eleventh consecutive quarter of negative capital growth. Neighbourhood shopping centres were the best performing retail segment with an annual return of 7.6 per cent, while super and major regional malls lagged at 2.3 per cent.

 

Written by: Karen Jamal

 

To see the latest MSCI/Property Council Australia Annual Property  Index results, click here.

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