Time to buy Australian offices after 26% tumble, AMP CIO says

AMP says that office valuations in Australia are likely near the bottom after shedding more than a quarter of their value.

The Sydney-based wealth and pensions manager is now looking to the domestic office market for opportunities amid expectations that prices in the embattled sector don’t have much further to fall, according to chief investment officer Anna Shelley.

“We do think valuations are starting to bottom out,” she said at an Australian Financial Review conference in Sydney on Tuesday (Oct 29). “We’re now down 26 per cent, so we’re close to a similar drawdown” seen in the global financial crisis when values fell 30 per cent, she said. 

Some of the biggest funds in Australia’s booming A$3.9 trillion (S$3.39 trillion) pension system – known locally as superannuation – wrote down their office investments by up to 20 per cent last year and scaled back their exposure to property.

AMP now joins funds such as Australian Retirement Trust and Hesta seeking opportunities in the sector at home and abroad. Last week, Aware Super said it was teaming up with UK firm Delancey Real Estate to invest £1 billion (S$1.7 billion) into property, targeting high-end offices in central London. BLOOMBERG