HO CHI MINH, 1 MAY 2018 – After a record-breaking fourth quarter 2017, commercial real estate investment in Asia Pacific hit yet another high in the first three months of 2018.
Investment in the region hit US$40 billion, 22 percent higher than the previous record set in 2008 and up 34 percent on the first quarter of 2017.
The unprecedented activity was driven by strong demand in the region’s core markets of Japan, India, Hong Kong, Australia and China. India saw its second strongest quarter ever, surpassing US$1.6 billion, as offshore investors look to gain exposure to the rapidly growing economy of the Southeast Asian powerhouse.
The region also benefitted from the most traded city in the first three months of the year. Tokyo surpassed London to take the global crown with US$9.1 billion of investment in Q1 as investors almost exclusively targeted the city’s office sector.
Despite growing trade tensions and elevated stock market volatility, investors are still seeking value in real estate.Global real estate investment in the first quarter of 2018 came in at US$165 billion, 15 percent higher relative to the same period last year, and hitting the highest Q1 level in 10 years.
While fundamentals in many markets remain strong, JLL’s Pranav Sethuraman expects investment to soften by 5 to 10 percent, to around US$650 billion, as “investors pursue real estate through new avenues outside of traditional single-asset acquisitions.”
‘The growing prominence of debt financing, M&A activity, and alternative sectors all demonstrate that while the way investors access the sector may be shifting, their appetite for real estate has not diminished,” he explained.
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