Investors spend US$52 bil on Asia-Pacific real estate in 4Q2017

By Angela Teo / EdgeProp | February 12, 2018 6:03 PM SGT
Real estate investment volume in 4Q2017 for the Asia-Pacific region reached a new high of US$52 billion ($69 billion), a 16% increase from 4Q2016, according to new data released by JLL. Transaction volumes in Hong Kong and Australia grew the most.
Hong Kong’s investment jumped 171% y-o-y to US$7.4 billion, driven by big-ticket transactions. That includes Hong Kong real estate group Wheelock and Company’s US$1.15 billion sale of 8 Bay East at Kwun Tong to LVGEM (China) Real Estate Investment Co., as reported by Bloomberg in October 2017.
“Capital values of Grade-A offices in Hong Kong surged by 17.5% in 2017, the strongest growth among all real estate sectors,” comments Joseph Tsang, managing director and head of capital markets at JLL Hong Kong. Despite the limited supply of Grade-A office assets available in Hong Kong, Tsang says that there is still sufficient demand for capital values to increase a further 10% in 2018.
Meanwhile, real estate investment volume in Australia rose by 40% to US$7.2 billion in 4Q2017. “Investors are shifting their focus to Brisbane, Perth, Adelaide and Canberra, in light of tighter pricing and a shortage of investment opportunities in Sydney and Melbourne,” notes Andrew Ballantyne, head of research at JLL Australia.
Brisbane’s commercial property sector saw more investment activity in 4Q2017 ($1.9 million) than that of Melbourne ($1.1 billion).