The Asia Pacific commercial real estate markets continue to absorb the debilitating effects of a double whammy: limited liquidity has sucked capital from the market, and the global recession has produced a contraction in exports and manufacturing, which is adversely affecting property fundamentals. These changing, uncertain conditions have prompted investors to pause and reassess their investment strategies.
Transaction volume across the Asia Pacific region remains muted and is down substantially from previous levels. For the first two months of 2009, the year-to-date transaction volume of US$11.8 billion is 67 percent lower than the comparable figure in 2008. On a 12-month basis, investment activity is down 59 percent; transaction volume totaled US$272.0 billion as of February 2008, while investors placed only US$112.4 billion through February 2009. The year-over-year changes in transaction volume are most pronounced in Australia (–76 percent), China (–60 percent) and India (–56 percent).
While China attracted the most capital, US$2.9 billion, the “hottest” market in February was Japan, which recorded transaction volume of US$2.7 billion, the country’s second highest monthly total during the past 10 months. Investors are primarily targeting office product in Tokyo, which ranks as the least risky city in the region to allocate capital. Year-to-date, investors have closed more than US$2.5 billon of deals in Tokyo, compared to US$1.4 billion in Beijing and US$1.1 billion in Osaka.
Indicative of the increasing economic pressure in the region, Japan reported a record 49 percent decline in exports in February, while China’s exports were down 26 percent from a year earlier. Property market fundamentals, in general, are expected to soften further, and deal flow will remain limited until economies around the world begin to see some positive effects from various government stimulus programs.
Learn more about property investment trends in Asia and Australia with RCA's Global Capital Trends® reports.
|
|
2009 YTD
|
2008
|
|
Country
|
Metros
|
$ mil
|
# of Props
|
$ mil
|
# of Props
|
|
China
|
Beijing
|
$1,357
|
16
|
$15,410
|
133
|
|
Shanghai
|
$314
|
4
|
$8,099
|
84
|
|
Hangzhou
|
$339
|
8
|
$4,919
|
59
|
|
Tianjin
|
$119
|
7
|
$5,712
|
84
|
|
Chengdu
|
|
|
$1,342
|
13
|
|
Chongqing
|
$111
|
5
|
$1,542
|
28
|
|
Guangzhou
|
$13
|
1
|
$1,271
|
14
|
|
Foshan
|
|
|
$612
|
12
|
|
Nanjing
|
$137
|
6
|
$1,769
|
22
|
|
Xiamen
|
$20
|
1
|
$763
|
18
|
|
Wuhan
|
|
|
$435
|
8
|
|
China Other
|
$2,701
|
43
|
$17,001
|
386
|
|
Hong Kong
|
Hong Kong
|
$430
|
19
|
$8,819
|
204
|
|
India
|
India all
|
$266
|
1
|
$5,229
|
92
|
|
Japan
|
Tokyo
|
$2,504
|
50
|
$26,370
|
398
|
|
Osaka
|
$1,144
|
11
|
$4,556
|
67
|
|
Japan Other
|
$355
|
9
|
$5,373
|
119
|
|
Malaysia
|
Kuala Lumpur
|
$135
|
5
|
$2,716
|
36
|
|
Malaysia other
|
$115
|
2
|
$983
|
19
|
|
Singapore
|
Singapore, all
|
$363
|
1
|
$9,361
|
115
|
|
South Korea
|
Seoul
|
$195
|
3
|
$6,801
|
81
|
|
South Korea other
|
$25
|
1
|
$3,053
|
71
|
|
Taiwan
|
Taiwan, all
|
$204
|
6
|
$4,655
|
92
|
|
Asia Other
|
Asia other
|
$44
|
2
|
$4,463
|
108
|
|
Asia Total
|
$10,892
|
201
|
$141,254
|
2263
|
|
Australia
|
Sydney
|
$115
|
7
|
$2,424
|
59
|
|
Melbourne
|
$84
|
4
|
$1,820
|
55
|
|
Brisbane
|
$171
|
4
|
$1,372
|
43
|
|
Perth
|
$30
|
2
|
$884
|
33
|
|
Australia other
|
$482
|
14
|
$2,104
|
60
|
|
New Zealand
|
New Zealand all
|
$39
|
3
|
$544
|
37
|
|
Australia/NZ Total
|
$920
|
34
|
$9,148
|
287
|
|
Grand Total
|
$11,812
|
235
|
$150,403
|
2550
|
|
*Through February 2009; based on transactions US$10 million and greater
|