ASIATODAY.ID, JAKARTA – Property investment in the Asia Pacific region experienced growth of 13% on an annual basis (year-on-year/yoy) throughout the first quarter of 2024.
CEO of Asia Pacific Capital Markets Jones Lang LaSalle (JLL) Stuart Crow said, Asia Pacific is the only region in the world that will experience growth in commercial real estate investment in the first quarter of 2024, with investment volume reaching US$30.5 billion.
This is the second annual growth in property investment after experiencing a decline for 7 consecutive quarters.
“The increase in investment volume occurred amidst large-scale acquisitions by global investors, while institutional investors continued to invest,” explained Stuart in a report written by JLL, quoted Tuesday, April 30 2024.
The North Asia region leads growth in Asia Pacific, where Japan is the most active market in Asia Pacific with an investment volume of US$11.5 billion, up 29% yoy.
The Japanese property market is still supported by domestic buyers. Meanwhile, many foreign investors have taken an interest in property in Japan through large-scale acquisitions in the office, logistics and industrial sectors, driven by free financial conditions, positive yield differences and a weak currency.
Meanwhile, South Korea netted investment of US$4.3 billion, an increase of 73% on an annual basis (yoy). The office sector dominates investment thanks to a stable foundation, low unoccupied rates and strong rental demand.
Furthermore, Singapore made an investment of US$2.2 billion, growing by 14% yoy thanks to capital allocation to retail assets that have positive rental prospects and a favorable distribution of investment returns.
“The first quarter reflects continued investor interest amidst Asia Pacific’s strong economic foundations and attractive pricing opportunities across diverse markets and asset classes. We are seeing increased interest from both local and overseas investors across a range of risk profiles,” added Stuart.
Specifically for the office sector, throughout the Asia Pacific region, the office space business is still the most active even though investment volume experienced a slight decline of 1% yoy to US$12.6 billion.
The logistics and industrial sectors as well as the retail sector also each recorded growth. The logistics and industrial sector recorded investment of US$7.8 billion, growing 36% yoy, while the retail sector grew 8% to US$5.7 billion.
In addition, cross-border sectors such as logistics and industry, retail and residential recorded annual growth even though they were overshadowed by price uncertainty which caused the growth of cross-border activity to tend to be moderate.
Meanwhile, a number of other major countries in the Asia Pacific region, such as Australia, recorded an investment volume of US$3.0 billion, China at US$5.6 billion, and Hong Kong at US$0.7 billion. These figures show a decline compared to the previous year. Australia and China experienced a decline of 19% yoy, while Hong Kong recorded a decline of 54% yoy.
Head of Investor Intelligence Asia Pacific JLL Pamela Ambler said that interest rate uncertainty continues to influence investment activity in Asia Pacific. However, it will start to see recovery in 2024.
“Sentiment continues to be influenced by the strong US economy despite high underlying interest rates, meaning a rate cut may not be in the near future. Looking ahead, we expect investment activity to continue to strengthen as trading re-pricings, and investors readjust portfolios and their strategy with current interest rates.” Pamela concluded. (ATN)
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