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Asia Pacific transactions in Q3 2017 worth US$35 billion, according to JLL
HONG KONG, 7 November 2017 – Investors are channelling their capital into Asia Pacific, according to new figures released by JLL. Inter-regional investors remained active as they target India, China and Australia, with continued appetite from international funds for real estate in the region. In Hong Kong, a flurry of activity from offshore capital helped boost third quarter volumes to US$3.1 billion, up 27 per cent year-on-year and bringing year-to-date investment up nine per cent compared to 2016.
Cathie Chung, Regional Director of Research at JLL in Hong Kong, said: "In 3Q17, a number of mega deals were recorded in the retail sector, which is close to bottoming out, and industrial sector in anticipation of the Government's review of the revitalisation scheme. Investors' interest in the mega office deal however is not muted. We understand that a number of PRC investors are reportedly in the final stages of negotiating large en-bloc purchases and we expect some of these to complete. In most cases, however, the buyers are listed offshore, hence the weight of the capital controls is unlikely to be as strong."
India stands out in Asia Pacific
A major private equity deal in India is the latest in a series of high-profile investments into Indian real estate by institutional players this year. The real estate arm of German insurer and asset manager Allianz announced in October that it is partnering with Indian Sharpoorji Pallonji Group to establish a fund worth US$500 million, targeting the office market in India. JLL advised Sharpoorji Pallonji Group on the transaction.
"Commercial real estate transactions in Asia Pacific held up remarkably well into the third quarter of 2017," says Stuart Crow, Head of Asia Pacific Capital Markets, JLL. "Emerging economies such as India are attracting the attention of global investors and developers, who are keen on the growing population and subsequent urbanisation."
Global transaction volumes for Q3 came in at US$166 billion, with no change compared to the same time last year. Meanwhile, transaction volumes in Asia Pacific rose by six per cent compared to the third quarter last year, at US$35 billion. This brought Asia Pacific's year-to-date volumes to US$95.8 billion, 11 per cent higher than this time last year.
"India is the standout in Asia Pacific, and the top picks for investors include Mumbai, NCR and Bangalore, with more than two-thirds of total investments flowing into these cities. Most of this capital is flowing into office assets and residential assets under development," says Ashutosh Limaye, Head of Research, JLL India.
Real estate transaction volumes reached US$2 billion in India in Q3, with Singapore sovereign wealth fund GIC's US$1.4 billion joint venture with DLF Cyber City Developers forming one of the largest cross-border purchases in the regional real estate market in the quarter. The joint venture involved a portfolio of office and retail assets across India in August.
For more information, download the latest Global Capital Flows here.
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