A study conducted by global real estate consultancy called as the JLL, reveals that the commercial real estate transaction volumes in the third quarter has reached a records breaking high level in the Asia Pacific region. This year to date activity established a new high of US $ 128 billion.
Countries in the Asia Pacific region such as Hong Kong, Singapore and South Korea were said to be among the top ten buyers of global real estate market.
The transaction volumes for the period of July to September this year considerably climbed a whopping 18 per cent year on year to US 42 billion. According to JLL’s recently published Global Capital Report, this staggering performance is recorded as the best third quarter performance on record. Furthermore it indicates a 10 per cent increase in sales volume in comparison to last year. The report further establishes that the performance of Asia Pacific region in the first three quarters cumulatively of this year is positioned significantly that the global average transaction volume by a growth of 1 per cent.
Stuart Crow, the CEO of Asia Pacific Capital Markets, JLL says, “ Investors in Asia Pacific are very future oriented and therefore are seeing past current headwinds such as slowing growth and trade tensions.” He also adds on, “Liquidity has strengthened in markets such as Seoul, Tokyo and Singapore where the occupier fundamentals remain solid. We are expecting Asian investors to further diversify their real estate holdings with the region as well as globally in the months ahead as they look at seeking higher yields.” Amongst all the Asia Pacific Cities, Seoul is the most liquid with US $15.4 billion worth of real estate transacted in the first three quarters of this year. Shanghai as well as Singapore too stood out for the volume of real estate transactions.
Asia Pacific region’s growth has been further intensified by the robust recovery in the Singapore, where the year to date activity currently is at its all time high says real estate global experts. Likewise China is also driving the increase in transaction volumes in the region where despite the pending and looming trade wars with US the real estate sales activity remains elevated due to the vigorous transactions in the beginning of the year. Shanghai has reached US $ 14.4 billion year to date investment with US $ 3.5 billion transaction just in the third quarter. The Chinese city Shanghai was reported to be the largest recipient of cross border investments among Asia Pacific cities in the first three quarters of the year. This is then followed by Singapore and Sydney. Globally it is ranked third after Paris and London. Singapore’s commercial real estate sector has been one of the strongest in the world wit transaction volumes rising by over 175 per cent year on year due to strong growth of their rental market which lead to better net absorption. The commercial deal volume is at an all time high. This is supported by Allianz and Gaw Capital’s US $ 1.15 billion acquisition of the Duo Tower in July this year.
Sydney has been ranked as the third largest recipient of cross border investment in the Asia Pacific. Sydney has logged several high value commercial real estate transactions this year. The biggest being, Blackstone’s US $ 1.1 billion acquisition of a portfolio of office assets in the second quarter from the Scentre group. In the third quarter Sydney also say a sizeable foreign investment directed from Canadian pension funds as well as various Singaporean groups. The year to date cross border capital inflows to Sydney is a massive 88 per cent in comparison to last year with approximately US $ 3.5 billion foreign investments.
Asian investors are not only investing within the Asia Pacific region but also actively in overseas markets. Mr. Crow elaborated that, “ Asian investors are spreading their capital more broadly and are exploring real estate markets such as continental Europe where the debt costs are low and assets are available such as Germany and France who are seen as beneficiaries post Brexit. Asia Pacific’s real estate market is likely to hold steady as investors continue to allocate huge amount of capital to commercial real estate in search of yield without exposure to excessive risks.”
