Colliers International's latest report, Asia Market Snapshot Q2 2018, provides a detailed overview of property market performances across 14 markets throughout the Asia Pacific during the second quarter of 2018.

Asia Market Snapshot Q2 2018 at a glance:

• Hong Kong residential demand remains high.
• China retail activity sees an uptick.
• Competition grows for prime Seoul offices.
• Collective sales continue with strong momentum in Singapore.

Terence Tang, Managing Director of Capital Markets and Investment Services at Colliers International, Asia told WILLIAMS MEDIA, “During Q2, there may be signs of a slowdown in some areas, such as the flow of Chinese capital into Hong Kong’s property market, investors are still eager to seize on opportunities in this fast-growing region."

"Additionally," he said, "interest in residential and commercial projects in major cities such as Shanghai, Hong Kong, Singapore and Taipei remains high, while ambitious transportation initiatives continue to spur new investment possibilities in markets such as Thailand and Indonesia. We expect these trends and positive geopolitical signals such as the rapprochement between the two Koreas to keep regional property markets active even as global trade tensions appear to be on the rise.”

Collective sale maintains momentum

Continued strength in the highly sought-after Hong Kong and Singapore residential markets could prompt more collective sales. In Singapore, both foreign and local developers have shown a keen appetite for state land tenders and collective sales, and improving sentiment in the high-end residential property segment may spur collective sale activity, opening more prime sites up to developers. Similarly, in Hong Kong, a recent government tender for a residential site in the Kai Tak area set a record of USD2,265 per square foot, for a total of USD3.2 billion.

Airport expansions spur tourism growth 

Much-needed expansions of airports serving key tourism destinations are enhancing the outlook for the leisure sector. In the Philippines, the leisure segment is expected to benefit from a new terminal at Mactan-Cebu airport set to boost capacity to some 12.5 million passengers annually. Meanwhile, the international airport in Phuket, Thailand, has recently been expanded to accommodate higher visitor numbers, and the domestic terminal is also under renovation, which should heighten the island’s appeal to hotel groups and other investors.

Retail fuels investor interest in China 

Authorities in both Beijing and Shanghai have made upgrading local retail offerings a priority, fuelling investor interest in the sector. In Beijing, retail accounted for half of the recorded transactions in Q2, and restrictions on the conversion of retail properties in the city core are likely to create more opportunities going forward. In Shanghai, while the office market remains the most active in terms of investment, a government plan to turn the city into an international consumer destination helped prompt an 80% surge in retail deal value from the previous quarter.

Competition for prime assets on the rise in South Korea

While many uncertainties have yet to be resolved, the apparent success of the recent North Korea-U.S. summit in Singapore could prompt foreign investors to reassess the risk levels in the South Korea real estate market and compete more aggressively for prime assets. Competition in sought-after office markets such as Seoul’s Gangnam business district is already fierce, with the pending sale of the Centropolis Towers expected to fetch some USD1 billion -- a new record for a domestic office transaction. Activity is also likely to pick up as the investor base grows more diverse.  

"We will continue to see Asian capital returning to Asian markets in a big way as the yield compression in the E.U. and the U.S. continues and growing optimism in the Asian real estate markets," Tang concluded. 

Click here to view Colliers International Asia Market Snapshot Q2 2018 report. 

For more information or to discuss the report, phone or email Terence Tang, Managing Director of Capital Markets and Investment Services at Colliers International via the contact details listed below. 

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