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«The volume of commercial real estate investments transacted in Asia Pacific increased by 37% from US$28.2bn in Q4 2009 to US$38.6bn in Q1 2010. The announcement by the Chinese authorities of tighter lending conditions in the future encouraged investors to bring forward purchases. Elsewhere the improving economic conditions in the region helped drive investment activity. This quarter’s transactional activity outstripped the previous peak in Q3 2007, according to DTZ research published today.
Commenting on the figures, David Green-Morgan, Head of DTZ Research, Asia Pacific said:
“Asia Pacific’s investment market is buoyant. While domestic investors remain the most active players we are starting to see interest from foreign investors, who are slowly returning to the market. However, this quarter’s transactions were dominated by developers in China grabbing land in anticipation of tighter bank lending.”
The sale of Games City in Guangzhou, China for US$3.7bn was the largest deal since 2007 followed by a handful of mixed use development transactions with large lot sizes. China continues to increase its share of total volumes in Asia Pacific accounting for 65% of
investment volumes in Q1 2010. However, the overwhelming majority of these are land deals, in Q1 land deals accounted for 97% of all transactional activity in China.
DTZ is a leading global real estate adviser with a team of over 10,000 people operating under the DTZ brand across 148 cities in 43 countries providing solutions for clients around the world. Its clientfocused activities range from high quality capital market solutions, to cutting-edge occupier-led property services and advice. The comprehensive service offering across Europe, Middle East & Africa (EMEA), Asia Pacific and The Americas is based upon detailed local knowledge backed by firstclass research. With its full-service expertise spanning all real estate sectors, DTZ offers a global solution to meet each client’s particular property-related investment and business needs. The parent company, DTZ Holdings plc, has been quoted on the London Stock Exchange since 1987.
Investment activity in the region was also boosted by the return of successfully recapitalised REITs. In the first quarter of the year, REITs in Asia Pacific spent US$2.4bn. Despite sales of almost US$2bn this marks the first quarter since the final quarter of 2008 that REIT’s have been net buyers.
Activity continued to be driven by China, Japan and Australia, which when combined accounted for 92% of volumes in the first quarter. Investment in Japan more than doubled from US$3.2bn in Q4 2009 to US$7.2bn in Q1 2010 driven by five transactions above US$400 million. Volumes in China increased by 39% from US$18.1bn to US$25.2bn over the same period. Positive sentiment and continued good news on the economy led to an increase in volumes from US$1.9bn in Q4 2009 to US$3.0bn Q1 2010 in Australia.
David Green-Morgan added: “Going forward we may see a tailing off in investment transactions in forthcoming quarters, particularly in China as stricter bank lending criteria restrict developers’ ability to transact. Investment volumes may fall by up to a third in China in the next quarter as various government measures to cool the property market take effect.”» (CS della Società)
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