APAC real estate transactions hit record-high US$86b in H1: report

Property investment in Singapore doubled, with the office sector hauling in $6.37b in investments.

Real estate transactions in Asia Pacific (APAC) climbed 6% YoY to record-high US$86b in the first half of the year, according to JLL’s Global Capital Flows report.

Also read: APAC commercial property investment hit $163b in 2018

APAC was the only region to record a high percent increase globally, according to the report. However, the region’s momentum is likely to moderate over the rest of the year, whilst investment levels are projected to reach new highs in 2019.

“Due to the tightening of yields in core markets across the globe, particularly in Europe and [the] US, investors are made to look beyond their domestic markets in search of higher returns. Joint venture and consortium structures continue to increase in popularity for large deals across the region as investors seek to go more direct and see the benefit in partnering with long-term like-minded groups,” said Stuart Crow, CEO of markets APAC, JLL.

In Singapore, property investment doubled in the first half of the year after a subdued 2018. This was mainly driven by the office sector, which accounted for nearly US$$4.6b of the investments. In contrast, US$3b and US$4.7 was transacted for the office sector in 2018 and 2017, respectively. JLL noted that acquisitions in the office sector are likely to reach a new decade high in 2019.

“Singapore’s office sector has become a favoured investment destination over the last 12 months, largely supported by the market’s very favourable demand-supply dynamics and a benign interest rate outlook,” noted Chris Fossick, head of Southeast Asia.

“A big draw for investors is also its rising office rents. Singapore’s prime office rents are expected to continue growing over the next few years, backed by robust demand for the technology, professional services and financial services sectors,” he added.

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