28 August 2012 —Office buildings rated by Green Star and NABERS energy four star and above continue to outperform low and unrated assets, Investment Property Databank Australia’s Property Investment Results for the financial year 2012 show.
The company’s research, released in early August, found the stronger returns were currently driven by stability in capital values, which reflected strong tenant demand for sustainable product.
“The results indicate that owners who improve the sustainability attributes of their buildings are more likely to mitigate downside risk in office asset values.”
However the research also found property markets had softened.
“In the year to June 2012 all Australian direct property posted a total return of 10 per cent, 60 basis points below the peak of 10.6 per cent in September 2011.
“The result reflects a general softening across the macroeconomy with the exception of the resources sector. Looking forward, the cooling of the Chinese economy may slow the mining boom and detract from an Australian economic and property market recovery.”
The research also found the industrial sector was steady and “showed a slight moderation in returns declining by 20 bps to post an annual total return of 9.7 per cent”.
“The stable return was supported by favourable space market conditions, mainly due to strength in distribution assets and a lack of prime supply. The Western Australian market was the clear outperformer with strong demand from tenants linked to the resources industry.”