According to Jones Lang Lasalle (JLL’s) Global Capital Flows report, Asia Pacific real estate sector is leading the world in the total value of transactions completed in the first half of the year 2019. The total value of Asia Pacific real estate transactions has climbed 6 percent to a record high $86 billion when compared to the previous year.
The report further states that the Asia Pacific real estate sector is the only one globally to have shown such a high increase in transaction value.
Singapore has shown the maximum increase in real estate transactions in Asia Pacific, with yield in property investment doubling, when compared to 2018. The increase is mainly driven by the office deals. Office real estate deals accounted for almost $4.6 billion. Contrary to this, the property investment for the year 2018 had been rather subdued.
In 2018, the amount transacted for property investments in Singapore reached $ 3 billion, while in 2017 it was $ 4.7 billion. The property investment level for the year 2019 is expected to reach new heights.
“Singapore’s office sector has become a favoured investment destination over the last 12 months, largely supported by the market’s very favourable demand-supply dynamics and a benign interest rate outlook,” noted Chris Fossick, head of Southeast Asia, Jones Lang Lasalle.
The crucial factor responsible for the hike in investment rate in Asia Pacific real estate is the reduction in yields in USA and Europe which has prompted investors in those markets to look beyond their domestic markets.
The major drawback for the growth of real estate transactions in Asia Pacific is the increasing office rents in Singapore, which is expected to grow over the next few years. But, the increasing rents is assumed to be the factor that’s drawing the attention of other investors towards this region.