Vietnam, April 27, 2017 – Asia Pacific’s overall investment turnover in Q1 2017 increased by 6.2% year-on-year as investor sentiment remained positive despite flat year-on-year deal growth, according to CBRE Research’s preliminary Q1 2017 MarketView figures.
“Across the region, investment performance was polarized in different markets. Singapore and Japan recorded strong investment activity,” said Dr Henry Chin, Head of Research, CBRE Asia Pacific. “More investors are looking to Singapore for counter-cyclical opportunities, and this quarter saw the completion of three major office deals by international investors. In Japan, there was more demand from investors seeking assets for higher yields in cities outside central Tokyo, with Yokohama as a hotspot this quarter.”
Elsewhere, quarterly investment turnover declined in Australia—attributed to the drop in transactions—and China, where deals were mainly below US$250 million. Investors were looking at smaller deals within China, including decentralized offices in tier-one cities in Q1 2017.
Amid tighter controls on capital outflow, Chinese outbound investment slowed down with less big-ticket transactions. Some Chinese investors opted to engage in smaller deals. Outbound investment from Hong Kong and North America picked up. Several recently raised capital real estate funds deployed their capital in Japan while two listed Hong Kong companies acquired office buildings in Singapore.
For the office sector, the upcoming / completion of major new high quality projects in China and Singapore, and the high incentives offered in Australia and Seoul, continued to support flight-to-quality and flight-to-value relocation among occupiers. Leasing activity was driven by the technology, media, and telecoms (TMT) sector and domestic financial institutions.
In the region’s retail sector, overall leasing sentiment has improved, however, most retailers in Asia Pacific remain cautious, displaying stronger demand for more affordable opportunities. They are taking longer to negotiate leasing terms, conducting due diligence. In China, the luxury market recorded single-digit growth as more high-end consumption stayed within the country.
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