COMMERCIAL property investments in Asia-Pacific attracted US$177 billion in direct investments in 2021 with capital deployment volumes returning to pre-pandemic levels last seen in 2019, according to real estate consultancy JLL in a press statement on Friday (Feb 11).
According to the consultancy, full-year 2021 investment volumes rose 26 per cent on year – led by a surge of activity across Australia and China, as well as sustained resilience in Japan.
Australia was the region’s biggest draw for investment as volumes rose to US$35 billion in 2021, up 170 per cent from the previous year on the back of logistics platform deals.
The Australian logistics sector alone saw a record high of US$9.3 billion in transactions, including the A$3.8 billion (S$4.1 billion) sale of Blackstone’s Milestone portfolio assets to Singapore’s sovereign wealth fund GIC in partnership with Hong Kong-listed property manager ESR Cayman.
In general, logistics investments across Asia-Pacific reached US$48 billion to represent a 50 per cent year-on-year growth, as well as a doubling of allocations since 2019.
JLL attributed this trend to intensifying investor interest in larger deals of over US$300 million. It predicts such interest will grow due to robust rental growth in Asia-Pacific, coupled with investors’ desire to further reposition their portfolios despite a compression in logistics yields.
The consultancy also observed a rebound in office and retail investments over the year. It highlighted the office market as Asia-Pacific’s most liquid real estate asset class, while attributing a renewed interest in the region’s retail assets to a recovery in consumer spending.
Notable deals include marquee transactions such as Lendlease’s AS$1.2 billion sale of Melbourne Quarter Tower, as well as Link Reit’s 50 per cent acquisition of 3 Sydney retail assets for about AS$538.2 million.
Stuart Crow, JLL’s chief executive (capital markets) for Asia-Pacific, believes there is a strong conviction among investors to increase exposure to the region’s property sector in 2022, with a focus on larger deals and platform acquisitions.
“Investors want more exposure to Asia-Pacific real estate to take advantage of attractive returns from the sector and are willing to move up the risk curve to diversify portfolios,” added Regina Lim, JLL’s head of capital markets research for Asia-Pacific.
“With record amounts of dry powder and an expanding appetite, we expect increased momentum in 2022 and remain steadfast in our view that investment volumes will cross the US$200 million mark this year,” she said.
Source: https://www.businesstimes.com.sg/global-enterprise/asia-pacific-real-estate-investments-back-to-pre-pandemic-levels-in-2021-jll
