Asia Pacific commercial real estate transaction volume set new quarterly and annual highs in Q4 2017 amid robust investment activity in China, Hong Kong, Singapore and Japan. Property funds and property companies drove demand, accounting for half of total turnover.

Several big ticket transactions were completed, with the top ten deals accounting for 30% of total turnover. Major deals included the sale of The Centre for US$5.1 billion and The Link REIT’s retail portfolio for US$2.9 billion, both in Hong Kong.

Cross-border investment also set quarterly and yearly highs as investors from Hong Kong and Singapore turned more active in overseas markets. Pan-regional private equity real estate funds were active in deploying capital across Asia Pacific, primarily in Japanese regional cities.

Asia Pacific will continue to attract solid investor demand in 2018. However, transaction volume is likely to moderate as the pool of investible stock has shrunk further following the completion of several major deals in 2017.

China

Improving fundamentals are promoting more investors to seek investment opportunities in selected tier II cities including Hangzhou, Nanjing and Chengdu.

More M&A transactions between developers were recorded in Q4 2017. Activity typically involves large developers acquiring projects from smaller groups.

Japan

Given the limited investment opportunities at present, there is solid interest in portfolios and large-scale properties that enable investors to build scale. 

Investment in areas outside Tokyo continues to increase as investors seek higher yields. 

Indonesia

There are signs of a turning point in the residential sector, led by the middle segment. However, prices are still well below all-time highs and luxury demand remains weak.

Local and foreign investors retain a keen interest in hospitality assets and development projects in locations outside of Java, most notably in Lombok, Flores and other outer islands. 

For more information or to discuss the report email Henry Chin, Ph.D. Head of Research Asia Pacific CBRE via the contact details below. 

Source: CBRE

Similar to this:

Record-breaking Asia Pacific Q4 '17 property investment sounds a positive note for 2018

Signs of a Singapore pick-up notwithstanding usual slower sales in January

The rush for rail in Southeast Asia’s fastest growing cities