21 September 2012
| last updated at 05:26PM
PROPERTY NEWS: Jakarta residential spikes; China, India heat up retail market
OUTPERFORM: Developing nations are outperforming in real estate indexes
Jakarta outperformed all monitored markets in Asia in the high-end residential sector, supported by strong underlying fundamentals, according to the latest Residential Index from Jones Lang LaSalle. The city is set to see the strongest price growth for the rest of 2012 due to solid local demand.
“The market has been fuelled by strong wage and employment growth, low interest rates and high consumer confidence. We expect this upward trend to continue for the rest of the year, in line with projections that Jakarta will see the strongest price growth in the luxury residential space in 2012,” said Todd Lauchlan, Country Head, Jones Lang LaSalle Indonesia.
Manila was another emerging city that registered double-digit growth at 10.5 per cent in its luxury property market in the 12 months to end-Q2.
On the other hand, developed markets such as Hong Kong, Singapore, Shanghai and Beijing saw annual declines in high-end residential prices of up to 8 per cent.
Meanwhile, Jones Lang LaSalle’s new report, Redefining Retail Investment, predicted that annual investment volumes in retail real estate could hit RM550 billion globally by 2020 due to increasing cross-border activity, showing growth of around 50 percent on the projected volumes for 2012 (RM336–382 billion).
Its new Retail Real Estate Momentum Index identified China and India as tops among 20 countries with the strongest momentum in retail real estate globally. Commenting on the Index, David Hand, Head of Investment for China, Jones Lang LaSalle said: “There is no doubt that China offers an enticing and exciting proposition to investors globally. Not only is it set to become the world’s largest consumer market, but China is projected to be a US$15 billion (RM45 billion) a year retail real estate investment market by 2020.
“The investment landscape will become more globalised, fuelled by a burgeoning middle class, rapid urbanisation, strong consumption growth and significant expansion of quality retail infrastructure. It is definitely the one to watch this decade.”
Arthur de Haast, Head of International Capital Group, Jones Lang LaSalle said: “The number of investable geographies has expanded globally as growth markets like China, Brazil and Turkey are attracting global investors. Together with an improvement in the quality and availability of retail assets, rising liquidity levels and further progress in real estate transparency, the retail investment sales sector is set for further rapid globalisation.”