High net-worth investors are behind a big surge in capital being invested in the commercial property sector around the country.
Alceon managing director Trevor Loewensohn says there’s an insatiable demand for somewhere to park their cash from these high net-worth market players.
“We are in unchartered territory in terms of interest rates, frothy equity markets generally, the understanding of technology and the like, and I guess property is a nice safe haven,” he told Australian Financial Review.
“People have a lot of cash, so our high net-worth investors and family offices and small institutions are desperately looking for relatively secure yield-based assets or investment opportunities, so that demand is insatiable I would say.”
At global investment manager AMP Capital for example, they have seen a surge in demand from retail investors, watching $30 million a month of capital flow through their platform.
AMP Capital’s Carmel Hourigan also spoke to AFR.
“This is a phenomena we are seeing around the world,” she said.
“Talking to the partners of our US business, they have seen a real pick-up in activity from huge private individuals who can write significant cheques much faster than institutions and they are a growing power around the world.”
Property managing company Charter Hall’s chief investment officer is Sean McMahon who says he has never seen such an appetite from individual investors.
“We are in an extraordinary period where it is not only the listed sector but our direct unlisted business, which is effectively mums and dads investing directly into those funds,” he told AFR.
“We’ve seen record activity there.”