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Investment volumes are up by 12% in Asia Pacific following optimistic investor sentiment
SINGAPORE, OCTOBER 15th, 2010 — New research from Jones Lang LaSalle’s capital markets experts, shows improving investment levels across Asia Pacific’s property markets, off the back of optimistic business sentiment, resurging investor confidence and strong economic fundamentals. Direct commercial real estate investments in Asia Pacific totalled US$18 billion this quarter, a 12% increase on Q2 according to Jones Lang LaSalle.
Preliminary figures suggest that Singapore has seen a notable increase of over 500% in total direct commercial real estate transactions over the same period last year, with Malaysia seeing a 76% increase and Australia a 42% increase over the same period.
Stuart Crow, head of Asia Pacific capital markets for Jones Lang LaSalle comments, “With a number of significant transactions expected this quarter and buoyed by positive business sentiment, market fundamentals continue to improve in the region. It is expected that we will see continued enthusiasm for real estate by investors expecting a low interest rate environment and an increase in portfolio deals as the investment market continues to grow.”
The pick up in the investment market, has resulted in several large portfolio deals in 3Q10. In Japan, Japan Retail Fund sold its non-core retail assets to a joint venture between Kenedix and US hedge fund Elliott Associates, whilst in Australia, Jones Lang LaSalle advised Colonial First State Retail Property Trust on the purchase of four Direct Factory Outlet centres at a total value of USD473 million from Austexx Proprietary Limited.
Dr Megan Walters, head of research for Asia Pacific Capital Markets for Jones Lang LaSalle said “Capital values continued to climb across most of the region in Q3. An increase in institutional acquisitions (en bloc transactions) has been observed and it is expected that more will follow suit although funds may be selective for assets.”
Cross border transaction volumes rose 23% quarter on quarter in Asia Pacific reaching US$5 billion in Q3, with Australia seeing close to a 110% year on year increase in cross border transaction volumes. Looking ahead, Jones Lang LaSalle anticipates that transaction volumes in Asia Pacific will show an increase of 15 to 25% over 2009 figures, reaching the US$77 billion mark approx. by the year end.
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