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Singapore entities surpassed those in Hong Kong in terms of real estate investments across the Asia Pacific (APAC) region in Q4 2017, according to a new report from JLL.
In fact, institutional investors and sovereign wealth funds from the city-state injected a total of US$2.9 billion into this asset class, while those in Hong Kong spent US$2.2 billion.
Overall, investments in the APAC region increased by 16 percent on an annual basis to reach a new record high of US$52 billion, as companies continue to raise their portfolio allocations to properties there.
“Traditional favourites Hong Kong, Australia and Japan all saw an increase in transaction volumes, with Hong Kong’s red-hot market leading the way,” said JLL.
“Hong Kong’s Q4 transaction volumes reached US$7.4 billion, a 171 percent year-on-year increase driven by mega-deals such as the US$1.15 billion sale of Wheelock’s 8 Bay East in Kwun Tong.”
Australia also remains on the radar of investors thanks to robust rental growth potential and comparatively higher yields of properties in Sydney and Melbourne. Consequently, investment volumes there rose by 40 percent on an annual basis from US$5.2 billion to US$7.2 billion in the quarter under review.
“Investors from Singapore, Hong Kong, Japan, the United States and Canada continue to focus on prime properties despite a lack of available stock,” said JLL Australia’s research head Andrew Ballantyne.
“While Sydney and Melbourne remain the favoured investment destinations, tighter pricing and a shortage of opportunities have resulted in increased activity in Brisbane, Perth, Adelaide and Canberra. Brisbane commercial property markets accounted for more investment activity during the quarter (US$1.9 billion) than Melbourne did (US$1.1 billion),” he added.
Meanwhile, property investments in Japan grew 31 percent year-on-year to US$10.5 billion. In particular, Tokyo accounted for 45.5 percent of the allocations, while the surrounding prefectures of Chiba, Saitama and Kanagawa collectively made up 22.2 percent of the overall investment volumes in the fourth quarter.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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