By Petra Blazkova on November 8th, 2017
Commercial real estate transaction activity in Asia Pacific has been strengthened in 2017 by a surge in the multifamily sector, the new edition of Asia Pacific Capital Trends shows. Activity in other income-producing sectors declined in the first three quarters of the year as high pricing and lack of available stock in key markets hampered investment.
The multifamily sector grew by 73% in the first nine months of the year, buoyed by demand for apartment blocks in China, Singapore and Hong Kong. The biggest deal of the year so far was Anbang Insurance’s $2.3b purchase of a portfolio of Japanese residential assets in March. Investment in the office sector – the largest income-producing sector in Asia Pacific – fell 5% compared to the same period last year.
As for capital flows, the level of Chinese investors’ outbound capital toned down after three consecutive years of extraordinary growth. In contrast, Hong Kong outbound volume swelled. It is becoming increasingly difficult to differentiate between mainland Chinese and Hong Kong cross-border capital. If combined, their capital outflows to Asia Pacific increased by 53% year-over-year in Q3’17, based on rolling 12-month data.
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