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Singapore and Japan saw strong property investment activity during the first quarter of 2017, according to CBRE’s preliminary MarketView figures.
“More investors are looking to Singapore for counter-cyclical opportunities, and this quarter saw the completion of three major office deals by international investors. In Japan, there was more demand from investors seeking assets for higher yields in cities outside central Tokyo, with Yokohama as a hotspot this quarter.”
In general, property investment turnover in Asia Pacific rose 6.2 percent on an annual basis in Q1 2017, as investors remain upbeat even though the number of transactions remained the same. However, investment performance was polarized in different markets.
For instance, property investment turnover dropped quarter-on-quarter in Australia due to a decline in deal volume. Likewise, China recorded weaker turnover and deals were mainly below US$250 million (S$348.75 million).
Due to Beijing’s tighter restrictions on capital outflow, outbound investments from China slowed down, resulting in fewer big-ticket transactions, while some Chinese investors chose to take part in smaller deals.
Conversely, outbound investments from Hong Kong and North America gained momentum in the quarter. For instance, several newly formed property funds deployed their capital in Japan, while two Hong Kong-listed firms bought office buildings in Singapore.
In the office segment, the completion as well as pipeline of new large-scale and high quality projects in Singapore and China continued to support relocation among tenants to more affordable premises and office space with better specifications.
Specifically, leasing activity was driven by local banks and companies from the technology, media, and telecommunications (TMT) sector.
Meanwhile, leasing sentiment in Asia Pacific’s retail segment picked up pace in Q1 2017, but most retailers in the region remain cautious, showing stronger demand for lower cost properties. They are also spending more time to negotiate leasing terms and perform due diligence tests.
This article was edited by Denise Djong.
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