There has been a recent avalanche of capital directed at property investment as the FY 18/19 comes to a close, with a multi-billion dollar capital inflow astonishing onlookers, and there seems no end in sight as big players join the party on a daily basis.
Property giant Cromwell Property (founded by CFMG Capital Chairman, Ross Stiles) announced a $375million raising on Wednesday 26 June and completed it less than 24 hours later on Thursday 27 June. Cromwell were joined by other property funds in Growthpoint Property, Centuria, Dexus, Mirvac, GPT and National Storage REIT bringing $4.4 billion into the market in less than 12 months, a figure not attained since 2010.
With the avalanche of capital hitting listed and unlisted REITs, the net effect on market capitalisation has seen spectacular growth of 19% or a $26 billion gain in the A-REIT index in the past 6 months alone.
The raisings by these major property funds are designed for each to pursue and fund acquisitions and developments over the next 12 months. The instant success of these raisings, combined with their intended use underline the confidence in the Australian property sector over the next 12 months with investors all showing an appetite for yield and capital growth and property funds in the hunt for well priced acquisitions.