Cross-border transactions involving properties in Asia Pacific
increased in Q3 2013, both intra-regionally and from investors
purchasing from outside the region, revealed a CBRE report.
The
trend includes Asia-based private institutions and investors looking for
opportunities to park capital abroad, as well as rising activity from
pension funds and sovereign wealth funds from outside Asia Pacific.
While
there was more activity from foreign investors, the report noted that
local investors still dominated in most markets as they were able to
move faster considering their domestic advantage.
High-net-worth
investors from Asia were specifically active in seeking large commercial
assets in offshore markets, with deals including the acquisition of
Singapore’s Grand Park Hotel by a Chinese family for US$877 million
(S$1.095 billion). Earlier this year, that same family purchased two
office properties in Australia.
Such investors are one of the
most significant contributors to cross-border flows. For the last
quarter of this year, overseas investment from the segment reached
US$631 million (S$788 million), or up 69 percent quarter-on-quarter and
571 percent year-on-year.
Greg Penn, Managing Director, Capital
Markets, Asia, said: “High-net-worth investors are becoming more
positive about the market, but increasingly they see value and returns
coming from direct investments like real estate. As a consequence they
are diversifying away from their traditional equity and bond holdings to
increase their exposure to real estate.”
As for overall market
growth, the volume of commercial real estate transactions in Asia
Pacific rose 10.8 percent to US$21.6 billion (S$27 billion) in Q3 2013
from US$19.2 billion (S$24 billion) in the previous quarter. The quarter
also saw market sentiment diverge with upbeat markets led by China,
Japan and Australia. These markets recorded steady buying activity from
local groups and sustained interest from foreign investors.
Meanwhile,
Singapore and Hong Kong witnessed weaker activity due mainly to
government cooling measures – “although transaction volumes in Singapore
did increase due to a few isolated big deals – whilst sentiment and
activity weakened in Indonesia, Malaysia and Thailand”, the report said.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
Related Stories:
Tenders awarded for two industrial sites
District Watch: District 16