International investors chase Australian real assets

New research shows Australian real assets are attracting international interest.

Perpetual Corporate Trust and Preqin's report, Real Assets Growth in Australia reveals the capital flowing into local infrastructure projects is increasingly global, as the sector rides a wave of growth.

According to the research, the growth in Australia's real assets sector saw the amount of capital secured in the sector reach a peak of $3.2 billion in 2017.

The research shows private equity real estate deals have jumped significantly over the last year, with more than 234 transactions completed in the 12 months to the end of June. Alone, the total value of deals made in the first half of this year are worth 80% of the entire amount of deals made in 2018.

Preqin head of real assets Patrick Adefuye said there were several reasons for the flow of international capital into Australian real assets.

"The Australian real assets industry is growing, and investors overseas are turning towards the region. The tax incentives for foreign investors, the depreciating Australian dollar and the privatization wave in the infrastructure industry have awakened investors' appetite, and this can be seen in the increased fundraising for the region," Adefuye said.

"There is an upward trend in the amount of capital collected as well as in the number of real assets deals announced. Investors are seeking stable returns and they are looking towards Australia for its potential to offer long-term, low-risk opportunities."

Perpetual Corporate Trust general manager Glen Dogan added the conditions in Australia are ripe for significant investment.

"This, coupled with the ongoing strength of the Australian economy and positive investment outlook, will continue to encourage investor demand," Dogan said.

"Australia's economy is expected to grow and is supported by a pipeline of long-term infrastructure projects largely as a result of a clear focus and commitment from the Australian government. The pipeline and demand for infrastructure will be driven by Australia's growing populations and capital cities and offers investors the chance to participate in some of the world's leading infrastructure projects.

"As the hunt for yield continues and investors search for reliable returns, we believe Australian real assets present long-term, innovative and exciting opportunities for global investors."

Read more: Perpetual Corporate TrustPreqinGlen DoganPatrick AdefuyeReal Assets Growth
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