20% growth in Asia-Pacific real estate investment growth in Q1: JLL

INVESTMENT growth in the Asia-Pacific real estate sector grew 20 per cent in volume in the first quarter of this year, led by gains in Singapore.

Around US$40.8 billion in capital was deployed via direct real estate investment into the region during the quarter, said real estate services firm JLL in a report released on Thursday (May 12).

Singapore recorded the biggest jump — 134 per cent — to US$5.7 billion in investments on the year. This was driven mainly by large transactions in the office and retail space.

South Korea recorded the next biggest growth, at 89 per cent to US$8.2 billion on diversified investments across office, retail, logistics and industrial sectors. Australia was third-largest in terms of growth trajectory, rising 49 per cent to S$4.7 billion.

Despite declining 26 per cent year on year, Japan remained the region’s largest investment market, with a deal volume of US$8.5 billion. China was flat with volumes totalling US$8.3 billion.

The retail sector registered the largest growth in the first quarter, climbing 39 per cent year on year. Over US$8 million in capital was deployed into retail assets.

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The office sector took the lead in total volume, advancing 9 per cent on the year to reach US$17.3 billion in direct investment. Investors continued to be bullish on the sector, buoyed by improved net absorption and rental growth.

Activity in the logistics and industrial sector rose 3.5 per cent year on year. The pace of growth, however, was moderated. The sector managed to garner only US$8.3 billion in capital deployed in the first quarter, JLL said.

Hotel transactions remained resilient at US$3.1 billion. More hotels changed hands as investors attempted to buy at bargain or to convert underperforming hotels into living products. JLL expects the sector to rebound further this year. It is projecting transactions to rise 15 per cent to US$10.7 billion for the full year, from the year-ago period.