Four Asia Pacific cities make it to Global Top 10 for real estate investment

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TOPS: Direct investment in commercial real estate in Q3 2012 in Asia Pacific dipped slightly to US$22.4 [RM68.62] billion compared to US$23 [RM70.45] billion in Q3 2011 and US$26 [RM79.64] billion in the second quarter, says Jones Lang LaSalle’s latest Global Capital Markets Research.

According to the firm’s new Global Capital Flows report, year to date volumes in Asia Pacific this year are in line with 2011 numbers; with US$71 [RM217.50] billion transacted in the first three quarters of 2011 and US$70 [RM214.43] billion this year to date.

Four of the most active cities in the first three quarters of 2012 were in Asia Pacific: Tokyo, Hong Kong, Seoul and Singapore.

Stuart Crow, Head of Asia Pacific Capital Markets, Jones Lang LaSalle said: “While transaction activity has slowed in some markets around the region due to subdued economic growth forecasts, transaction volumes in Australia improved 17 per cent year on year on the back of higher yields. China remains very active, as do Hong Kong and Japan, and we see the strong REIT markets supporting further activity across the region. At the same time, large global sovereign and pension funds are returning their focus to Asia Pacific and we maintain our expectation for full year 2012 volumes in Asia Pacific to reach US$88 [RM269.57] billion, compared with US$98 [RM300.21] billion in 2011.”

Cross border investment: Cross border purchasers accounted for US$3.7 [RM11.33] billion of transactions during the quarter in Asia Pacific, or 16 percent of total investment in the region. Of this, US$2.3 [RM7.04] billion came from purchasers outside of Asia Pacific. This was buoyed by a large investment of US$1.04 [RM3.18] billion from the Canadian Pens0069on Plan Investment Board (CPPIB) into the Barangaroo mixed use project in Sydney.

There has been a slowdown in investment activity into Asia Pacific from European investors. Capital outflows by European investors have exceeded their capital inflows into Asia Pacific so far this year.

There were four Asia Pacific cities in the top 10 largest recipient cities globally of cross border investment year to date: Sydney, Hong Kong, Tokyo and Shanghai. There were three Asia Pacific countries in the top 10 cross border purchasers year to date, Singapore, Malaysia and China.

Alistair Meadows, Director, International Capital Group Asia Pacific at Jones Lang LaSalle said: “Activity between regions continues to be characterised by larger lot sizes involving pension and sovereign wealth funds that are active globally for the first time due to the relaxation of restrictions on cross border investment. Asian local buyers are taking up the deals being exited by Europeans and Asian capital continues to flow out of the region looking for core assets in key gateway cities globally. Asian funds continue to like buying in London in particular.”

Stand out deals in Q3 in London included our KSWP/EPF (Employees’ Provident Fund) and a consortium of South Koreans both of which recently purchased office buildings for £200 [RM979.04] million and £150 [RM734.28] million respectively.

 


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