Southeast Asia continued to be blessed with upbeat investment sentiment in the second quarter of 2013, while real-estate owners in Thailand injected assets into property funds, according to CBRE Research.
Overall commercial real-estate transactions in the Asia-Pacific region declined by 11% to US$19.2 billion (Bt600 billion) after an unusually strong first quarter.
The market remained active and the quarterly total was in line with volumes recorded last year, according to the latest "Asia Pacific Capital Market View" published by CB Richard Ellis, a property consultancy.
Active markets were led by Japan, although transactions fell by almost 50% after surging in the first quarter. Other upbeat markets were Australia, Malaysia, New Zealand, Singapore and South Korea, which all recorded an increase in investment turnover on quarter.
Comparatively subdued markets included Hong Kong, where the imposition of double stamp duty resulted in the exit of speculators from the market. Taiwan was also quiet as domestic insurance firms remained inactive after the rise in minimum yield requirements on commercial property introduced last November. Mainland China recorded a decline in investment volume by 22% quarter on quarter but market sentiment remained positive.
An improvement in cross-border investment was recorded, with transaction volume surging by 73% quarter on quarter. Asian capital and international institutional investors were the major buying forces. There were also more Western property funds with recently raised capital starting to acquire assets, although they remained net-sellers in Asia as some funds approached maturity.
"There were some major acquisitions by locally listed property funds in Thailand and some new property funds with several more scheduled to be listed in the second half," James Pitchon, executive director and head of CBRE Research in Thailand, said yesterday.
Capital values in the Asia-Pacific region continued to increase slowly and outpace rental growth on the back of solid investment demand for quality assets. Yield compression for core assets was observed in markets including Sydney, Brisbane, Tokyo, Seoul and Singapore.
Nick Axford, head of global research, said that on the back of strong investment demand for yield-accretive assets, capital values were expected to increase at a steady rate although markets with weak occupier demand could see some mild downward adjustment.
Greg Penn, executive director of CBRE Investment Properties for Asia, said: "The Asia-Pacific market is expected to remain active in the second half with a large pipeline of deals in Australia, China and Japan. The steady regional economy combined with high levels of liquidity and relatively low borrowing costs will continue to fuel buying momentum."