Asia Pacific real estate investment volume falls 17% in 1H2022: JLL

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August 4, 2022 5:59 PM SGT
The office sector was the most liquid asset class, drawing in US$30.6 billion in 1H2022, although this was still a 8% y-o-y decline. (Picture: Samuel Isaac Chua/The Edge Singapore)
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SINGAPORE (EDGEPROP) - Market research by JLL estimates that about US$70.9 billion ($97.8 billion) in regional Asia Pacific transaction volumes were conducted in the first six months of this year. This represents a 17% y-o-y decline compared to the same period in 2021.
JLL says that this decline in investment volume stemmed from a moderation in overall deal activity in several of the region’s major markets. This came as investors reacted to a tightening rate cycle and inflationary concerns, the consultancy adds.
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“Investors adjusted capital deployment strategies to align with a more aggressive rate tightening cycle,” says Stuart Crow, CEO, capital markets, Asia Pacific, JLL. “Clear opportunities exist and we’re advising clients to expect a new price discovery phase to remain a dominant theme for the remainder of 2022, as macroeconomic headwinds and ongoing inflationary pressures influence decisions.”
The office sector was the most liquid asset class, drawing in US$30.6 billion in 1H2022, although this was still a 8% y-o-y decline. Industrial and logistics investment activity worth US$14.6 billion was recorded, which was a 37% y-o-y decrease. Capital deployments into retail assets came in at US$14 billion or a 31% y-o-y decline.
Pandemic-related lockdowns in China contributed to a 39% y-o-y contraction in investment volumes to US$14.1 billion. Meanwhile, a lack of logistics transactions in Japan meant that investment volume decreased to US$11.5 billion, falling 33% y-o-y.
South Korea saw the largest amount of capital deployment in 1H2022 with $15.3 billion, buoyed by major office transactions. Singapore saw an uptick in investment volumes, jumping 81% y-o-y to US$9.3 billion on the back of big-ticket office and mixed-use development transactions.
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According to JLL, sustainability frameworks remain high on the agenda for many investment committees. The consultancy expects investors to deploy more capital into value-add strategies by refurbishing old offices into green buildings as occupiers increasingly choose higher-quality space post-pandemic.
Looking ahead, investors will be more selective with an eye on the long term while pricing in financial market tightening to any future investments, says JLL.

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