, Australia
64 views

These two APAC markets saw the highest surge in commercial property investments in Q1

Investments jumped 68% and 280% in Australia and Singapore, respectively.

Asia Pacific’s commercial real estate sector recorded over US$34 billion in direct investments in the first quarter of 2021, a decline of less than 1% year-on-year, says JLL. According to the firm’s Capital Tracker report, investment volumes decreased 23% compared to the fourth quarter of 2020, but outperformed the other two regions – North America, and Europe, Middle East and Africa – which registered larger declines year-on-year.

Across Asia Pacific, the majority of investment activity occurred in markets with strong domestic liquidity bases. JLL’s analysis reveals that transactions in Japan ($11.5 billion), China ($8.3 billion) and South Korea ($4.3 billion) comprised over 70% of total investment volume in the first quarter, mirroring activity in 2020.

In signs of growing stability and the brewing desire to allocate capital, global investors continued to ramp up deployments in the first quarter. Volumes into Australia increased by 68% year-on-year ($3.2 billion), buoyed by transactions including the acquisition of Martin Metro Place South Tower by Investa and Manulife. In Singapore, volumes surged by around 280% year-on-year ($2.5 billion), prompted by large investments by global players including the strategic investment of Allianz Real Estate into OUE Bayfront core asset, which is providing confidence of a prolonged recovery of global capital flows into the region.

“Irrespective of the year, first quarter investment volumes are typically on the light side as investors refine strategies, complete due diligence and search for new opportunities – 2021 was no exception. However, solid deal flow in the fourth quarter of 2020 coupled with record amounts of dry powder waiting to be deployed give us confidence that the recovery will gain further momentum as the year progresses,” says Stuart Crow, CEO, Capital Markets, Asia Pacific, JLL. 

In the first quarter, logistics assets continued to attract investor interest, with volumes rising 26% year-on-year and comprising 23% of all transactions. Office, which remains the region’s largest commercial real estate sector, drew 47% of all investment in the first quarter, amounting to year-on-year growth of 2.5%. Retail and hotel activity made up 22% of all transaction activity in the first quarter, 5% higher year-on-year. Multifamily and other sectors consisted of the remaining 8%. 

“Allocations to Asia Pacific will only grow in 2021 with transactions fuelled by recent activity in markets with strong domestic liquidity and the region’s attractiveness to global investors. Secular tailwinds will continue to accelerate the weight of capital into sectors like logistics, while new economy themes will drive capital allocations this year and beyond. We maintain that investment volumes will rise by 15 to 20% in 2021, driven by structural growth in logistics, data centres and multifamily sectors, while office investments are likely to rebound in tandem with economic growth,” says Regina Lim, Head of Capital Markets Research, Asia Pacific, JLL.

According to JLL, uncertainty surrounding regional office demand will continue to weigh on transaction volumes, but the perception of risk around the sector will create opportunities for investors. In the first quarter, office leasing was muted in most metros, but demand picked up in major centres including Seoul, Shanghai and Singapore. The firm predicts that demand for flex space and sustainable, energy efficient buildings will attract investors to the longer-term future of the sector.

 

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Get Realestate Asia in your inbox

Jakarta’s industrial transactions off to a lacklustre start in Q1

Prominent industrial estates recorded zero sales.

Expensive city fringe homes drive Singapore price hike in Q1

The overall price index for private residential properties rose by 3.3%.

Top 10 APAC cities by industrial investment activity in 2020

Seoul, Tokyo, and Sydney grab the top three spots.

A sneak peek at Singapore office market’s journey to a post-COVID world

Savills outlined transition stages the market has to go through over the next few years.

Project delays leave Jakarta’s total retail space stuck at 2.84sqm

Three malls are slated to open sometime this year.

Vietnam’s new apartment supply up 73% amidst third wave of pandemic

There were 3,900 new units launched in Q1.

Singapore office vacancy rate increases for fourth straight quarter in Q1

Vacancies of CBD Grade A office buildings rose by 0.3ppts to 7.3%.

Here’s a rundown of Korea’s most prominent logistics deals in Q1

Total investment volumes decreased 7% during the quarter.

Hong Kong records highest office rental decline in APAC in Q1

The decline in rents across the region is expected to decelerate this year.