R E S E R V E B A N K O F A U S T R A L I A
Box A: International Commercial Property
Over recent years, commercial property prices have risen strongly in many countries. Where
increases have been large they have typically been broadly based: across offi ces, retail and
industrial properties, and evident both in direct property indices and listed property trusts
(Table A1 and Graph A1). As in residential property markets, price growth has generally been
strongest in English-speaking countries.
Table A1: Commercial Property Prices
Year-ended percentage change in capital values
All commercial property
Offi ce property
Three years to
Three years to
(a) Average annual percentage change.
(b) Offi ce data relate to Frankfurt only.
(c) Data relate to year(s) to September. Offi ce data include retail property.
Sources: Investment Property Databank; Japan Real Estate Institute; Jones Lang LaSalle; Property Council of
New Zealand; Singapore Urban Redevelopment Authority; US Federal Reserve
The upward pressure on prices
partly refl ects strong fundamentals,
with economic growth contributing
to an increase in rents and declining
vacancy rates in many countries. But
developments also appear to refl ect
strong investor demand, particularly
from pension funds seeking assets
offering long-term income streams
at high yields.
As in other asset markets, the rise
in prices has been associated with
an increase in borrowing. In many
countries, banks have increased
lending to the commercial property
Listed Property Trusts
Accumulation indices, December 1994 = 100
Sources: Bloomberg; Global Property