Firm spends on Australian office blocks for stability

Sovereign fund China Investment Corp plans to buy Australia's biggest office block portfolio from Morgan Stanley for $1.82 billion, highlighting Beijing's appetite for stable assets offshore as the mainland economy sputters.

The $200 billion CIC made its biggest Australian investment just as Sydney's commercial property market braces for a glut of new office space, despite little apparent appetite from tenants to expand their footprints in the country's main business hub.

"It's a gamble, particularly considering US rates might be going up for the first time this year and when they rise, we'll probably rise as well," said CLSA senior real estate analyst Michael Scott.