Asia Pacific 2013 Investments Total $126.7 Billion

Asia Pacific 2013 Investments Total $126.7 Billion

Commercial News » Asia Pacific Commercial News Edition | By WPJ Staff | January 16, 2014 10:37 AM ET

Asia Pacific enjoyed the strongest year on record for commercial real estate markets, with investments reaching $126.7 billion by year-end. 

Commercial transaction volumes for Asia Pacific in 2013 were 29 percent higher than the previous year, surpassing the previous record of $120.5 billion in 2007, according to a report from Jones Lang LaSalle. 

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"2013 proved to be an outstanding year for Asia Pacific commercial property markets, exceeding our revised expectations of $120 billion," Stuart Crow, head of Asia Pacific capital markets at Jones Lang LaSalle, said in the report. "Unrelenting demand has prevailed in spite of macro concerns around China's growth outlook, stability in the EU, and the U.S. government's fiscal strategy."

A separate report from JLL showed global commercial real estate investment volumes reached $549 billion in 2013, increasing 18 percent from the previous year. 

The 2013 record-breaking investment growth in Asia Pacific was led by the region's core markets of Japan, China, Australia and Singapore, as investor confidence grew due to on-going improvements in both debt and equity markets. 

The resurgent Japanese market reported a 67 percent year-over-year investment growth, reestablishing its position as the third most active market globally after the U.S. and U.K., JLL reports. Transaction volumes in Japan reached $12.2 billion in the fourth quarter of 2013, led by portfolio deals, bringing the total for the year to $41.7 billion. 

Investment volumes in China reached $8.5 billion in the fourth quarter, and totaled $25.1 billion by year-end, increasing a whopping 72 percent from 2012. Another market with record investment levels was Australia, with $6.4 billion in the fourth quarter and $21.9 billion for the year, up 33 percent from 2012. 

Despite lower confidence in the Singapore market from analysts, investment activity increased to $3.3 billion in the final quarter of 2013, to reach another full-year record of $11.8 billion, increasing 40 percent from 2012. 

On the other hand, investment volumes for Hong Kong in 2013 totaled $7.3 billion, dropping 35 percent from 2012, JLL reports, with the bulk of domestic activity coming from end-users and local/PRC developers. 

"In 2013, we continued to see a mismatch between supply and demand across a number of markets in the region. As a result, investors moved up the risk curve in search of higher yields and to mitigate against potential pressures from global fiscal policy," Dr. Megan Walters, head of research for Asia Pacific capital markets at JLL, said in the report. "Given the strength of investor sentiment and on-going demand, we expect markets to perform as well, if not better, than 2013 for the remainder of 2014."

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