Asia Pacific Property Investments Rebound

Asia Pacific Property Investments Rebound 35% In Q3

ASIA PACIFIC – Property investment volume across the region rose 35 percent during the third quarter compared to Q2 2020, revealing green shoots of recovery as institutional investors resumed their acquisitions after holding back during 1H 2020 due to the COVID-19 pandemic, reported Mingtiandi on Tuesday (3 November).

According to a research by property consultancy JLL, although real estate investment during the quarter under review was 19 percent lower on an annual basis, deal-making activity quickened its pace across several major markets as property investors made use of their capital with more confidence compared to the 2 prior quarters.

“The first major signs of a resumption of investment activity emerged in the third quarter, with investment volumes showing meaningful improvement in China (down 10 percent YOY), South Korea (down 2 percent) and Japan (down 18 percent),” said Stuart Crow, CEO for Asia Pacific capital markets at JLL.

“While uncertainty will remain for the foreseeable future, we believe that low transactional activity has bottomed out, and our optimism for the fourth quarter continues to grow.” However, real estate investment activity in Hong Kong (down 27 percent) and Australia (down 45 percent) remained sluggish.

By property segment, Asia Pacific’s industrial market led the pack, with deals volume spiralling by 76 percent on an annual basis thanks to robust demand for warehouses and data centres.

While transactions in the office sector fell by 35 percent year-on-year, it still fared better than the retail and hotel markets, where deals plunged by 51 percent and 87 percent respectively.

Another factor that boosted acquisitions in the region is the lower financing costs, which edged 50 to 100 basis points in the year-to-date.

So far this year, JLL analysts named Tokyo and Seoul as the leading cities in the globe for property investments.

Still, Singapore stands out as a sanctuary for corporate activity, with the authorities slashing sales to commercial sites to prevent an oversupply situation, while Chinese tech giants are establishing regional hubs in the city-state as its gateway to the rest of Southeast Asia.

These 2 factors are expected to propel office rents in Singapore by 30 percent from 2022 until 2024, although rental rates are forecasted to slide by as much as 7 percent in 2021, noted JLL.

“We’re confident that the fourth quarter will present a broader range of opportunities across the region, particularly in classes like multifamily and rebounding markets like Singapore,” added JLL’s regional head for capital markets research Regina Lim.

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