Jones Lang LaSalle’s (JLL) latest Asia Pacific capital markets bulletin revealed Australia as the top choice for inter-regional investors.
Named one of two AAA-rated countries in the Asia Pacific, Australia has been supported by good fundamentals of a transparent property market and economic links to the rest of Asia.
Several large transactions involving buyers from Canada, US, Switzerland and other global funds pushed the total inter-regional inflow to Australia to US$1.2 billion, up 442.1 percent year-on-year.
“Our team advised on the sale of 50 percent of Northland Shopping Centre in Melbourne which was sold to the Canada Pension Plan Investment Board for US$484 million at a yield of 6.3 percent in May this year,” said John Talbot, Head of Australia Capital Markets for Jones Lang LaSalle.
“This illustrated the level of interest by international investors in Australia, attracted by our strong growth prospects amidst a global slowdown.”
The bulletin also revealed that China was the largest market for property investments in the second quarter, at more than US$5 billion.
Meanwhile, investment volumes in the region rose 11.1 percent year-on-year at US$19 billion, with domestic transactions chalking up US$11.2 billion alone.
Cross-border Asia money comprised US$4.5 billion, while inter-regional funds accounted for US$3.3 billion.
By end 2011, total investment volume is expected to reach US$100 billion.
“Investors who are interested in diversification of their portfolios are likely to be attracted to real estate in the region, based on cash flow from rent with the potential to keep pace with inflation,” said Stuart Crow, Head of Asia Pacific Capital Markets at Jones Lang LaSalle.
“We have seen a series of institutional investors increase their allocations to real estate, sustaining market volumes.”
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