Asia Pacific real estate investments down 30% in Q1

May 15, 2023

AISA: According to the latest research by JLL, Asia Pacific’s commercial real estate investment activity amounted to US$27 billion in 1Q2023, a significant drop of 30% compared to the same period in the previous year.
Most of the region saw lower volumes of investment activity.

Singapore, for instance, recorded a 66.8% year-on-year decline to US$1.9 billion, South Korea experienced a 69.5% year-on-year drop to US$2.5 billion, while China’s investment volume fell 16.4% year-on-year to US$6.9 billion. Australia also experienced a 25.6% year-on-year fall to just under US$6 billion.

However, Japan was the only nation in the region to see an increase in investment volume, rising 4.7% year-on-year to US$8.9 billion. JLL’s report attributed this surge to headquarters building disposals from Japanese corporates and a flurry of acquisitions by J-REITs in the office sector.

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JLL’s report also highlighted that investment volumes fell across all sectors during the first quarter of 2023. The office market investments fell 26.6% year-on-year to $12.7 billion, which JLL notes as one of the sector’s softest quarters on record. Similarly, investment volumes in the logistics and industrial sector fell by 24% year-on-year, largely due to a new cycle of price discovery and funding challenges.

In the retail sector, investment volumes totaled US$5.3 billion in 1Q2023, which is lower than the five-year quarterly average of US$7.5 billion.

While Singapore saw some retail deals, such as the sale of a 50% stake in Nex shopping mall by Mercatus Co-operative to Frasers Property and Frasers Centrepoint Trust for $652.5 million, large-scale shopping mall trades were absent from the rest of the region.

Source: Estatedia