Asia Pacific commercial real estate investment shows signs of recovery
By
JLL reports that commercial real estate investment in Asia Pacific has grown for the third consecutive quarter, signaling a potential turnaround from the 2023 downturn.
Key points:
- Q2 2024 investment volume reached US$27.3 billion, a 2% year-on-year increase
- H1 2024 total investment volume was US$57.5 billion, up 7% from the same period last year
- Office remains the most active sector, with US$10.7 billion in Q2 investments
- Retail and hotel sectors also showed growth, with H1 2024 volumes up 12% and 19% respectively
Japan was the most active market, recording US$5.8 billion in Q2 trades, driven by hotel deals.
Stuart Crow, CEO of Asia Pacific Capital Markets at JLL, noted that despite elevated borrowing costs in most markets, the office sector is showing growth. He expects return expectations to improve as bond yields decline in coming quarters.
Cross-border investment volumes fell 38% year-on-year to US$7 billion in H1 2024, with most markets dominated by domestic investors. Hotel investments were favored for cross-border capital.
Singapore and Australia saw year-on-year growth in investment volumes, while South Korea experienced a slight decline.
Data centers have emerged as a bright spot, particularly in Southeast Asia, accounting for 52% of Asia Pacific investment volume in this sector.
==
==
Pamela Ambler, Head of Investor Intelligence at JLL, anticipates that expected US Federal Reserve interest rate cuts in September could lead to easing borrowing costs in the region, potentially influencing commercial real estate investment.
The report suggests that despite ongoing challenges, the Asia Pacific commercial real estate market is showing signs of recovery and adaptation to changing economic conditions.