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October 19, 2016

Asia Pacific Capital Markets in Focus – October 2016.

Regional Highlights/Outlook: 

  • Investors increasingly look for to value in off-market deals, newer/secondary cities as well as newer sectors. Asset-specific strategy may be needed going-forward
  • Cap rates have compressed to record low in some markets on the weight of capital chasing assets, but positive spreads to risk free rates remain
  • Slower growth year-to-date in AP-focused fund fundraising but record dry powder levels remain

Market Conditions:

  • Transaction volumes in Q3 2016 were up 5% y-o-y to USD 33.1bn. China and Singapore were up y-o-y, but Australia and Japan were weaker as owners held onto stock. Deals volumes in the first nine months were stable at USD 86.6bn
  • Cross-border investors remain active on both sides of the ledger, accounting for 31% of Q3 total
  • Intra-regional purchaser capital flow within the region trended slightly higher in Q1-Q3. Capital flow by inter-regional purchasers regionally have fallen y-o-y

Market Fundamentals: 

  • Office | Rents grew in most markets but mixed demand by city. Demand momentum slowed in Q3
  • Retail | Retailers are expanding in Australia but cautious towards expansion across most of Asia
  • Industrial | Demand is supported by 3PLs & e-commerce in Asia, and retailers in Australia
  • Residential |Sales improved in Greater China and Singapore but slowed in Australia in
  • Hotels |Diverse trading performance. Still strongest showing in Tokyo and Australia

For more, including investment deal highlights and city analysis across Asia Pacific, download our Capital Markets in Focus Report.

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Myles Huang

Asia Pacific Capital Markets Research Drector, JLL

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