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JLL: Asia Pacific real estate investments rise 39% y-o-y in 1H2021

PETALING JAYA (July 22): The investment volume in Asia Pacific commercial real estate reached US$83.5 billion (RM353 billion) in the first half of 2021, translating to a year-on-year (y-o-y) growth of 39%, said property consultancy firm JLL.

Although 1H2021 investment volume is 6% lower than 1H2019,  in its “APAC Capital Tracker 2Q2021: Reallocation Underway” report, JLL anticipated Asia Pacific investment volume to rise 15-20% by the end of the year. 

JLL CEO for Asia Pacific capital markets Stuart Crow said that the Asia Pacific real estate investment is clearly back as investors reaffirmed their positive outlook, ensuring a sizeable upswing in y-o-y volumes in the first half.

“We expect further activity in 2H2021 as investors look to portfolio deals, corporate sale and leaseback, and seek more diversification into sectors like logistics and industrial, life sciences and multifamily,” said Crow.

China, Australia and South Korea comprised 69% of the total investment volume, while activity in Japan was weaker due to disruptions from Covid-19. The report also revealed that office, logistics and industrial, and retail investments made up 31%, 30% and 30% respectively for 2Q2021.

Among some noteworthy transactions in 1H2021 are the Dentsu headquarters in Tokyo, which is in the process of being bought by Hulic for up to US$3 billion; and the David Jones flagship store in Sydney, which was sold to Charter Hall for US$374 million (A$510 million) with a 20-year leaseback.

Meanwhile, JLL Asia Pacific head of capital markets research Regina Lim expects logistics and industrial investments to double up to between US$50 and US$60 billion by 2025, while at the same time, investors are seeing signs that office markets are stabilising.

“With the ongoing appetite for defensive assets and expected growth avenues like sale and leaseback, we maintain our expectations that investment volumes will rise 15-20% in 2021,” said Lim.

Malaysia: High demand for warehouses

Similarly in Malaysia, demand for warehouse space is high, driven by growth of e-commerce and an increase in manufacturing activities due to improved demand for manufactured goods globally, especially electrical and electronic products.

“Many investors, including REITs, are diversifying their real estate portfolios into this sector as it is proven to be the most resilient amidst the pandemic,” said JLL Property Services country head YY Lau (pictured).

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