According to the latest data from Jones Lang LaSalle, the global real estate consultant, the turnover of Asian Pacific Region commercial real estate in the first three quarters of this year was the highest in the over years, and it has recorded a new high of US$128 billion. Shanghai, Singapore, and Sydney successively have become the cities receiving the largest amount for cross-border investment in the region. The company believes that investment in the Asia-Pacific region in the fourth quarter will further increase, and expects that the investment for commercial real estate in the region will increase by 13% year-on-year.
The total amount in the last quarter increased by 18% annually.
The latest global financial flow report latest announced by Jones Lang LaSalle points out that the Asian Pacific Region commercial real estate performance in the first three quarters of this year was significantly better than the global average turnover of only a 1% increase. In the third quarter alone, the total transaction volume in the Asia Pacific region increased by 18% year-on-year to US$42 billion, and it is the third quarter with the best performance on record.
The Chief Executive of Asian Pacific Region Capital Market Division of Jones Lang LaSalle, Stuart Crow expresses that investors in the Asia-Pacific region pay close attention to negative factors such as slowing economic growth, trade tensions and so on. The flow of funds in markets such as Seoul, Tokyo, and Singapore is increasing, and the tenant market factors in these markets are fundamentally good, so the company expects Asian investors to continue to diversify their property investment in the region and globally in pursuit of higher rental returns. In Asian cities, Seoul recorded real estate transactions for US$15.4 billion in the first three quarters of this year.
Shanghai received the most cross-border investment.
The rising turnover in the Asia-Pacific region is benefited from China keeping active trading, and another factor is the steady recovery in Singapore, the turnover of which has maintained a record high since the beginning of the year. The amount of investment in Shanghai since the beginning of the year reached US$14.4 billion, of which US$3.5 billion was recorded in the third quarter of this year. In the first three quarters of this year, Shanghai was the largest recipient of funds for cross-border investment in the Asia Pacific region, followed by Singapore and Sydney. Shanghai ranks the third in the world and is only second to Paris and London.
At the same time, thanks to strong rental growth and net absorption, Singapore's office market turnover has increased by more than 173% year-on-year, making it one of the best-performing markets in the world. In July this year, GAW Capital partnered with Allianz to spend US$1.15 billion to purchase Duo Tower, making Singapore record the highest turnover.
As the third-largest city in the Asia-Pacific region to attract cross-border investment, Sydney recorded several cases of large-amount transactions this year. The largest case is Blackstone spending US$1.1 billion to acquire the office building asset portfolio from Scentre Group in the second quarter, and external finance from the Canadian pension fund and Singapore consortium entered in the third quarter. The cross-border funds from the year-to-date have been 88% higher than the same period last year, and the amount of external finance investment reached US$3.5 billion.
Hong Kong ranks among the top ten investors in the world.
Asian buyers are active overseas. In the first nine months of this year, the Asia Pacific market is the largest source of funds for cross-border investment. Singapore, South Korea, and Hong Kong rank among the top ten investors in the world. Crow points out that Asian investors have more extensive investment areas than before, and are paying attention to markets such as the European interior. Due to low borrowing costs and asset sales, markets such as Germany and France are also expected to benefit from Brexit. As investors continue to invest in commercial properties and seek to pursue returns without risking excessive risks, he expects the Asia Pacific property market to remain stable.
