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JLL: Asia-Pacific CRE appetite shows sustained growth

Transaction volumes for Asia-Pacific commercial real estate increased 11% year over year in the first nine months of 2017, weighing in at a total of US$95.8 billion, JLL said Dec, 12.

For 2017, the CRE sector received the greatest boost from Singapore and India, according to JLL, with sales activity in Greater China and South Korea also tracking higher.

Globally, the biggest CRE deal historically was inked in November by CK Asset Holdings Limited's HK$40.2 billion sale of The Center to a Chinese consortium anchored by Beijing-based China Energy Reserve & Chemicals Group. The 75% stake in the 73-story building was sold more than a year after being placed on the market at a lower price of HK$35 billion.

Contributing to the firmer transactional volumes in 2017 was CapitaLand Commercial Trust's acquisition of the Asia Square Tower 2 in Singapore at S$2.09 billion from a fund backed by BlackRock. JLL said the asset received "strong interest" from major global investors, indicating a sustained rebound of the Lion City's office real estate sector.

Elsewhere in India, Allianz and Shapoorji Pallonji launched a 50/50 Indian real estate fund worth US$500 million in October to invest in the country's office sector. The fund will have the mandate to purchase or develop office properties in India amounting to US$1.5 billion, Bloomberg News reported Oct. 12, with a focus on the Mumbai, Bengaluru, Hyderabad, Pune, Chennai and National Capital Region markets.

Additionally, the property consultancy predicts that this uptrend will continue into 2018, with full-year transactional volumes in the CRE sector forecast to rise 5% year over year to US$140 billion from US$135 billion.

The projected growth will come on the back of a sustained upswing in core property markets in the region, as well as stronger demand in emerging markets such as India, JLL said.

As of Dec. 12, US$1 was equivalent to S$1.35.