Optimum conditions for Australia's commercial property market have taken investment levels to record levels, and made Sydney the third most coveted destination for global capital.

The latest data indicates that investment in Australia’s commercial property sector surged in the 2014/15 fiscal year to scale unprecedented heights.

According to figures from Colliers International’s Australian Investment Review investment in commercial property leaped by 19 per cent year-on-year in the 2014/15 fiscal year to a hit a total of $28.88 billion.

John Marasco, Managing Director of Capital Markets and Investment Services at Colliers International, said that the Australian commercial property market continues to harbour strong appeal for investors both from home and abroad.

“Transaction volumes across the industry are up, as both offshore and domestic investors demonstrate a continuing strong appetite for Australian commercial property,” said Marasco.

“The low interest rate environment, the falling Australian dollar and our stable economy have combined to create optimum conditions for Australian commercial property.”

Marasco noted that the year’s leap in Australian commercial property investment builds upon recent momentum in the sector in tandem with the mounting interest of foreign capital.

“The strong performance of the sector in recent years, and the potential for continuing growth have made more offshore investors consider the Australian market for the first time. At the same time, conditions for domestic investors have also been positive, so together demand for commercial property assets is at an all-time high.”

According to Colliers data this upsurge in demand for commercial property in Australia has pushed Sydney to the position of third most popular destination for offshore investors around the global, just behind London and Manhattan while squeezing ahead of Shanghai and Paris.

SydneyRanks3withOffshoreInvestors

The industrial sector was the bigger grow in the 2014/2015 fiscal year, leaping 56 per cent year-on-year to hit $6.45 billion, on the back of surging demand in the logistics and transport sector due to limited new supply. Offshore investors accounted for $2.63 billion in purchases of Australian industrial property during the last fiscal year, accounting for 41 per cent of transactions in the sector.

Retail property investment saw impressive growth of 24 per cent year-on-year, with $7.541 billion in assets traded. Over half of the 157 sales in the sector lay within the $10 million to $30 million bracket.

Office sector transactions rose by 7 per cent to reach $15 billion in value, with mainland Chinese and Hong Kong investors playing a more prominent role, acquiring $1.11 in office assets during the 2014/2015 fiscal year.