Financial market volatility and a deflating global economy continue to inhibit commercial property investors worldwide. The Asia Pacific region has experienced a pronounced slowdown in real estate transaction volume as unprecedented events around the globe have effectively reduced capital market liquidity and investor confidence. In general, these uncertain times have produced greater caution, and still-active investors are reducing cross-border activity in favor of their home markets.
Transaction volume across the Asia Pacific region was down in 2008, ranging from a decrease of 24 percent for Japan to a decline of 77 percent in Australia. In January 2009 the market malaise continued; Real Capital Analytics (RCA) tracked only US$4.1 billion of transactions based on deals priced at US$10 million and above. The total represents a 36 percent decline from December 2008 and an 81 percent drop off from January 2008, when an active market registered transaction volume of US$21.4 billion.
In January 2009, the lion’s share of commercial real estate (CRE) transactions occurred in China (roughly US$2.2 billion) and Japan (US$1.1 billion). One of the larger recently completed deals was Singapore-based ARA Asset Management’s acquisition of the newly completed 51-story Nanjing International Finance Center, an office-retail property located in Nanjing, a key industrial base in Eastern China. The investment manager acquired the property for approximately US$234 million on behalf of its ARA Asia Dragon Fund.
RCA recently compiled its list of the top 50 largest investment property transactions completed worldwide during 2008. Indicative of the changing market conditions, each deal on the 2007 list topped US$1 billion (plus there were 70 more mega deals that didn’t make the cut), while there were only 19 such deals in 2008. The largest CRE transaction completed in the Asia Pacific theater last year was Champion REIT’s US$1.6 billion acquisition of a Hong Kong office and retail complex (see "Top 10 Asia Pacific Deals" below).
Learn more about property investment trends in Asia with RCA's Global Capital Trends® reports.
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Top 10 Asia/Pacific Deals in 2008
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Property/Deal Name
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Buyer
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Location
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Property Type
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# Props.
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Price (US$M)
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Great Eagle Holdings Ltd.
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Champion REIT
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Hong Kong
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Office/Retail
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2
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$1,603
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Resona Maruha Building
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Mitsubishi Estate
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Tokyo, Japan
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Office
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1
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$1,596
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Incheon Tower
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Portman Holdings LLC JV Samsung
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Incheon, S. Korea
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Development
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1
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$1,497
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Noida Sector 94 Dev. Site
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BPTP Ltd.
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Noida, India
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Development
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1
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$1,250
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Shinsei Bank-HQ Building
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Morgan Stanley
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Tokyo, Japan
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Office
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1
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$1,136
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New Jiangwan Town
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Tishman Speyer
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Shanghai, China
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Development
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1
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$926
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One George Street
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CapitaLand Limited
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Singapore
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Office
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1
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$835
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Chaoyangmen SOHO
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SOHO China
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Beijing, China
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Development
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1
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$787
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Japanese Logistics Portfolio
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MGA
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Fukuoka, Japan
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Industrial
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14
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$766
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Pinnacle Collection
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IOI Properties Bhd JV Ho Bee Investment
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Singapore
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Development
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1
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$762
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