>

Commercial property transaction volumes in Asia Pacific fall 14% in 2Q2020

By Charlene Chin

/ EdgeProp Singapore |

July 8, 2020 5:16 PM SGT

Join our Telegram channel and follow our Facebook for the latest update.

SINGAPORE (EDGEPROP) - Commercial property transaction volumes in Asia Pacific have fallen 14% q-o-q in 2Q2020, according to Knight Frank’s Asia Pacific research team.

On a y-o-y basis, commercial transaction volume in Asia Pacific fell by 41% to US$55 billion ($76.7 billion) in 1H2020.

In Singapore, domestic commercial transaction volume fell 87% year-on-year in 1H2020 to US$0.55 billion. However, cross-border transactions were less affected by the pandemic, with US$7 billion transacted to overseas investors - just 12% lower y-o-y.

Knight Frank says that Australia remains a key market for outbound Singapore-based capital: transaction volume from Singapore to the country was up 72% y-o-y in 1H2020, although volume remained low at US$1.39 billion.

“Singaporean government-linked companies have remained active investors in Australia this year, executing their long-term strategies of moving into core logistics and office assets,” observed Neil Brookes, head of capital markets, Asia Pacific, at Knight Frank.

Meanwhile in Hong Kong, outbound capital investing in commercial assets fell 66% y-o-y in 1H2020 to US$3.1 billion. However, in 2Q2020 alone, transaction volumes were up 48% q-o-q, suggesting a strong appetite for overseas assets, says Knight Frank.

“Hong Kong investors continue to show a keen interest in diversifying their portfolios overseas. Once travel restrictions lift, we expect that Hong Kong outbound investment will increase,” says Paul Hart, executive director, head of commercial for Greater China at Knight Frank.

Trends

Knight Frank has also observed that corporates have been adopting a sale and leaseback strategy, seeing an enquiries spike from companies that own corporate real estate across sectors such as automotive, electronics, media, retail and technology.

“Companies, institutions and governments are increasingly selling real estate assets and leasing them back, as a way of shoring up their balance sheets in the face of the economic volatility caused by the coronavirus,” explains Brookes.

Some property sectors have also maintained deal momentum across Asia Pacific. The industrial sector recorded a 11% drop in transaction volumes y-o-y in the last quarter, compared to a drop of 44% across all other sectors.

At the same time, Asian REITs have remained globally competitive. REITs in Singapore witnessed a drop of about 7% year-to-date, compared to their counterparts which saw a sharper drop of around 34% in Europe, and 25% for UK-listed REITs.

Knight Frank also expects that investors are waiting for distressed opportunities to arrive in the later part of the year. As at December 2019, it estimates that Asia Pacific-focused private equity funds had about US$38 billion of capital ready to deploy in Asia Pacific, well above the US$5 billion that was raised in 2007 and 2008 before the Global Financial Crisis.

Read also:

Singapore’s preliminary real estate investment volume in 1H2020 falls 45% y-o-y to $6.13 bil

Government serves up ‘degustation menu’ of sites in 2H2020

Some relief for landlords required to provide extra rental waivers for tenants

Tags:

Follow our channels to receive property news updates 24/7 round the clock.

Subscribe to our newsletter

Top Articles

1

Meet Amous Lee: the Singaporean developing and selling homes in Japan with FM Investment

2

Kopar at Newton: Well-positioned to leverage growth plans for Newton and Novena

3

Creditors put tycoon Chen Hongtian's HK$680 mil Frank Gehry-designed Hong Kong flat up for sale

4

Tanah Merah and Bedok: nexus of east region transformation

5

MCC Land runs ‘one price’ promotion for select units at Sceneca Residence, saving up to $144,000 for buyers

Follow Us On

Our Sites

Edgeprop.sg (previously known as The Edge Property Singapore) – is the best property portal for home-seekers, buyers, investors and real estate agents alike in Singapore. On EdgeProp, you will be able to find all the latest news and views, informational guides, historical transactions and rental searches, and research data and analysis.

Whether you are looking to buy, sell or rent apartments, condominiums, executive condos, HDB flats, landed houses or commercial properties, we bring you Singapore’s the most comprehensive and up-to-date property news and thousands of listings to facilitate your property decisions.

Make better decisions with our easy-to-use free and paid tools. The Edge Fair Value tool lets users calculate the fair value of a property and find properties below market value in Singapore. Meanwhile, discover all things en bloc, including Singapore en bloc news, trends and our En Bloc Calculator, which helps to determine the probability of a Singapore project being put up for collective sale.

Web Version 3.0.3

Aside from that, EdgeProp also offers a market trend tracker that lets you access historical property data, sales volume and compare how similar properties are selling, a heat map that lets you find out where all Singapore’s most popular property sales locations are, a HDB lease tool that lets you calculate your HDB tenure, an affordability calculator, and a property watch list to track your preferred Singapore property by project or location, as well as new launches.

On the lookout for undervalued property or buying to rent? EdgeProp’s powerful search filters let you personalise your property-seeking experience – whether you are looking for a property near MRT stations, amenities like schools and childcare centres, or a good-value condo with a sea view – so that you find exactly what you are looking for.

Commercial property transaction volumes in Asia Pacific fall 14% in 2Q2020

Trends

Related Articles