London remains the market of first choice for the 600 investors – surveyed in Colliers International's 2016 Global Investor Outlook.
New York ranks fourth, when comparing the preferred markets overall for global investors.
John Marasco,Colliers managing director of capital markets and investment services said "Sydney is considered a global gateway city so for investors it ranks up there with New York, London, Singapore and the like in terms of being an attractive destination for investment," he said.
"Melbourne is not far behind, and is seen as a good alternative to Sydney.
"Tenant demand is improving in both Sydney and Melbourne, with rental growth now occurring and vacancy rates reducing. This only adds to the appeal of these markets."
Real estate investment in 2015 is expected to hit a record high. Domestic investors still dominate direct real estate investment.
However one-third of total investment currently comes from offshore. China is now the largest offshore investor in Australian commercial property.
"Right now, Australian investors prefer to invest locally and we see very little investment offshore," Nerida Conisbee, Colliers national research head.
"This is very different from the previous cycle where Australia was the third strongest investor globally.
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