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Asia Pacific saw real estate transaction volume increase 19 percent quarter-on-quarter to US$23.1 billion (S$31.1 billion) in Q2 2016, a CBRE report revealed.
Despite the increase, overall market sentiment remained quiet, with the top 10 deals accounting for 30 percent of investment turnover.
Strong activity from international and regional institutional investors pushed up investment turnover by 73 percent quarter-on-quarter to US$8.6 billion (S$11.6 billion).
Investors, however, will be slower to source deals in H2 2016 and take longer to complete transactions considering the Brexit; the heightened geopolitical risks from the recent terrorist incidents in Europe; and the upcoming US presidential election, said CBRE.
“Investors will display a stronger appetite for core assets providing steady income streams, a trend that will exert downward pressure on yields. However, the rate of compression will slow due to weaker rental growth,” it added.
Meanwhile, despite registering several major transactions in Q2 201, the Singapore market remained subdued with limited stocks for sale while investors continued to be cautious.
In fact, domestic buyers were muted, with only one related-party office deal completed. The report noted that most local groups remained in wait-and-see mode as the price gap continued to curb activity, while some buyers look abroad.
Maintaining a positive long-term view of Singapore, foreign investors were more active during the period under review with the completion of several major deals.
Institutions were also active, led by the Qatar Investment Authority, which acquired Asia Square Tower 1 for US$2.5 billion (S$3.38 billion).
S-REITs, on the other hand, were quiet, and according to CBRE some S-REITs are expected to dispose non-performing assets, including a few shopping malls, in the coming months.
Looking ahead, CBRE expects investors in the office sector to focus on acquiring en-bloc buildings generating steady rental income. It advises investors to consider retail properties in suburban areas with good residential catchments as prime retail assets remain tightly held.
Buyers were also advised to look at ramp-up logistic facilities as well as self-storage and data centres.
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