Asia Pacific Commercial Real Estate Reached US$83.5B In H1

Compass Cambodia report, July 31 - According to real estate firm JLL, investment in Asia Pacific commercial real estate reached US$83.5 billion in the first half of 2021, indicating a 39 percent year-on-year increase, putting the total near to pre-pandemic levels.

Increased investment in the logistics, industrial, office, and retail sectors indicates that the region's capital markets are continuing to improve. According to JLL's Asia Pacific Capital Tracker, volumes from January to June 2021 were just 6% lower than pre-Covid levels for the same period in 2019.

China, Australia, and South Korea accounted for 69 percent of overall volume, whereas activity in Japan was lower owing to pandemic-related disruptions. According to a JLL review of capital flows in the second quarter of 2021, office investments accounted for 31%, while logistics/industrial and retail investments each contributed for 30%.

Thailand's commercial real estate investment volume reached 16.6 billion baht in the first half of 2021, up 20.5 percent year on year.

Logistics and industrial investments in the region increased by 215 percent year over year to $15 billion in the second quarter, owing to favorable demand dynamics fueled by e-commerce boom, relative yield spreads, and investors' desire to diversify into more resilient asset classes.

Major transactions, such as ESR's acquisition of Blackstone's Milestone portfolio in Australia, demonstrated the region's interest for high-quality logistics and industrial assets.

In the second quarter, office demand improved in most locations, resulting in $15.5 billion in investment.

For the first time since the fourth quarter of 2019, Australian central business district office markets saw positive net absorption, while office rents in Singapore and Shanghai began to rise.

In the first half of 2021, corporate sale and leaseback transactions accounted for more than 10% of total volume, up from an average of 7% from 2015 to 20. According to JLL, this trend has gained traction in Japan, where more corporate investors have shifted to an asset-light strategy to bolster their balance sheets since the onset of the epidemic.

In Australia, companies used sale and leaseback deals to unlock wealth and focus on their main businesses.

The Dentsu headquarters in Tokyo, which is being bought by Hulic for up to $3 billion, and the David Jones flagship store in Sydney, which was sold to Charter Hall for $374 million (A$510 million) with a 20-year leaseback, were among the sale and leaseback transactions.

Source: Compass Cambodia comprehensive arrangement

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