Commercial property investment deals in the Asia-Pacific region continued to grow in the first three months of the year, hitting US$38.6 billion, up from US$28.2 billion during the last quarter of 2009, according to a report by DTZ.
DTZ said that the increase was attributed to better economic conditions and the prospect of tighter lending in China, encouraging investors there to bring forward acquisitions.
The Q1 tally beats the previous peak in Q3 2007. The return of recapitalized real estate investment trusts (REITs), which spent around US$2.4 billion, also boosted the investment activity during the first quarter. They also sold almost US$2 billion of property, but Q1 2010 was the first quarter since Q4 2008 that REITs were net buyers, said DTZ.
Mr. David Green-Morgan, research head of DTZ in the region, said that foreign investors are slowly returning in the Asia-Pacific market, while domestic investors remained the most active players.
With more than US$25 billion of commercial property transacted during Q1, – which accounted for 65 percent of the overall activity in the Asia-Pacific, – China again led the region. Much of this came from investors replenishing their land banks.
The largest deal in Q1 was also in China – the US$3.7 billion-sale of the Guangzhou Asian Games site to a local developer.
Most of the markets covered by DTZ posted higher transactional activity in Q1 2010 compared with Q4 last year. Outside China, investors were mostly interested in more mature stable markets and cities in the region.
In Singapore alone, AEW Capital Management shelled out US$145 million for the purchase of Robinson Point on Robinson Road during Q1 – one of the biggest deals in the country in a year.