August 22, 2012
Property investment volume in the Asia Pacific remained strong despite global headwinds, pointing to the region's resilience, said Jones Lang LaSalle (JLL).
The global economy may be reeling from the continued effects of the eurozone crisis and North America's laggard economy, but the Asia Pacific is emerging as a steady bastion in the global headwinds.
The Q2 2012 Asia Pacific Property Digest (APPD) by JLL found that the region is still registering strong property investment volumes, a significant indicator of economic resilience. However, a slowdown in leasing activity has been seen, indicating that the Asia Pacific is not completely immune.
The report found that for the second quarter, direct commercial real estate rebounded - there was a 26% y-o-y increase to USD 26 billion. The surge was led by Japan, which saw the biggest y-o-y growth of 290% as it recovered from the Tohoku earthquake in March last year. In addition, Hong Kong, Singapore and China registered double-digit growth.
The increase in investment volume also supported a growth in capital value in most major markets. This was led by Jakarta and Beijing CBDs, where q-o-q capital values increased by 9% and 11% respectively. Meanwhile, Shanghai, Tokyo and Sydney saw modest gains of up to 1.5% in capital values.
However, the second quarter also saw a decrease in office activity of about 10% compared to the same period last year. This was attributed to corporate caution and the flow-on effects of ongoing economic uncertainty.
Head of Research Asia Pacific, Dr Jane Murray said, "The Asia Pacific property markets are holding up relatively well given the global economic backdrop. Leasing activity levels should continue to trend moderately lower than last year's record levels, while we expect investors will continue to search out opportunities, particularly in prime locations. In turn, we anticipate rents and capital values will continue to grow in most markets, albeit at a slower rate than 2011."
Added Jeremy Sheldon, managing director, Markets Asia Pacific, "While we are seeing some healthy growth forecasts for the Asia Pacific economy, leasing activity has steadied during the course of the year. There has been a decline in the established financial markets, however we are seeing strong demand in key South East Asian markets, and certain cities in China. While this pattern is likely to continue through to the remainder of the year, we are optimistic that leasing will remain largely stable."
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