The dominance of domestic firms in the Australian market is illustrative of an industry with relatively high barriers to entry, as well as investors’ preference for deal teams to be situated in local markets. The majority (66%) of non-domestic fund managers primarily utilize core strategies, suggesting that opportunities may only exist for larger managers that are able to deploy large amounts of capital to acquire prime assets. CIMB-TrustCapital Australian Office Fund I & II, as well as SachsenFonds Asset Management’s Australia Fund I-III, employ core strategies.
The lack of non-domestic fund managers exclusively targeting Australia looks set to continue: according to Preqin’s Real Estate Online, of the 10 funds currently in market solely targeting Australian investment, only one of these is being marketed by a non-domestic manager.