RCA Insights

There’s a Bright Spot Amid Asia Pacific’s Q1 Slump

By on April 30th, 2020

Amid the gloom of sliding first quarter transaction activity across Asia Pacific there is one bright spot within the major markets. Preliminary Real Capital Analytics data shows that South Korea has seen deal volume increase in comparison to the same period a year ago.

With Australia, China, Hong Kong, Japan and Singapore all registering significant double-digit declines in transaction activity it is slightly unusual to see such a different performance for one market.

For much of the first quarter South Korea was tracking ahead of Q1 2019’s investment tally even when the number of COVID-19 cases dramatically increased at the beginning of March. There were fears that the market would stall but the fact that the economy never went into a full lockdown helped sustain momentum.

Understandably, given the travel difficulties, much of the deal activity during the first quarter has been dominated by domestic buyers, although U.S. private equity has been present in the form of KKR and Blackstone. South Korean institutional investors, especially pension and insurance companies, remained focused on Seoul office properties as many of them had done in 2019.

The second quarter has got off to a slower start for the South Korean investment market so dealmaking may suffer as we move through the year and the economic reality of COVID-19 becomes more apparent in the domestic economy.

RCA will publish the Q1 2020 edition of Asia Pacific Capital Trends on May 6. This report examines the impact of the novel coronavirus on major markets across the region and discusses the outlook for the rest of the year.

Also on RCA Insights:

European Dealmaking Heads Into Period of Unknown

Chart: Global Deal Volume Tracker, First 110 Days

David Green-Morgan

Managing Director, Asia Pacific

DGreen-Morgan@rcanalytics.com

David Green-Morgan is a highly regarded global commercial real estate expert with 20 years of industry experience. Before joining RCA in November 2017, he spent six years at brokerage firm JLL in Singapore, where he was responsible for their real estate capital markets research globally. Prior to that he spent five years at Cushman & Wakefield in Sydney as head of Asia Pacific research. David started his career at Investment Property Databank (IPD) where he was at the forefront of data analytics to benefit clients’ decision-making.