Asia Pacific real estate most liquid asset class drawing in US$30.6 billion in 1H2022

Research conducted by JLL estimates that around US$70.9 billion ($97.8 billion) in regional Asia Pacific transaction volumes were recorded during the beginning of the year. This is an increase of 17% decrease in y-o-y in comparison to the same period in 2021.

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JLL states that the decrease in investment volume is due to an overall decrease in deal activity in a number of the major markets in the region. The reason for this was that investors responded to the tightening of the rate cycle and the possibility of inflation The consultancy says.

“Investors have adjusted their capital deployment strategies to be more in line with an rapid rate tightening cycle,” declares Stuart Crow, CEO, capital markets, Asia Pacific, JLL. “Clear opportunities are available and we’re encouraging clients to anticipate a new price discovery phase to be an important theme throughout the remainder of 2022 because macroeconomic headwinds and the constant inflationary pressures affect the decisions.”

It was also the class of asset with the greatest liquidity taking in US$30.6 billion for 1H2022, however it was still an 8% year-over-year decrease. The investment in logistics and industrial assets in the amount of US$14.6 billion was reported this year, which is 37% reduction compared to the previous year. The capital deployments in retail assets totaled US$14 billion, or 31% decrease y-o-y.

Lockdowns related to the pandemic in China resulted in the 39% reduction in investment volume in the region of US$14.1 billion. In addition, the absence of transportation transactions Japan led to an increase in investment volumes declined in the region of US$11.5 billion, down 33% in a year.

South Korea saw the largest amount of capital expenditure in 1H2022 at $15.3 billion, boosted by significant office transactions. Singapore witnessed an increase in investment volume, soaring to 81% year-on-year to US$9.3 billion as a result of major mixed-use and office development.

According to JLL sustainability frameworks are prominent on the agenda of numerous investment committees. JLL expects investors to put more money into value-added strategies, such as transforming old offices to green buildings since occupiers are increasingly choosing higher-quality office space post-pandemic.

As they look ahead the future, investors will be more prudent in the long run, as they price in financial market tightening for any future investments JLL says. JLL.