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Asia 3Q property transactions up 14% on quarter, says JLL

BEIJING: Direct commercial property transaction volume in Asia-Pacific reached US$18.2 billion (RM57.33 billion) in the third quarter, up 14 percent from three months earlier, led by Singapore, Australia and China, Jones Lang LaSalle (JLL) said on Wednesday, Dec 8.

The global real estate services provider also forecast in a report that the total would grow 15% next year to about US$88 billion.

"We will continue to see a further increase in volumes to the end of this year, but the number of buyers versus sellers is likely to come back to more realistic levels next year," said Stuart Crow, head of Asia-Pacific capital markets at Jones Lang LaSalle Inc.

Singapore was the top market mover in the third quarter, recording a 358% rise in volume on several large transactions and stood as the third-biggest market behind Japan and Australia in the region, in terms of total investment volume, JLL added.

Capital values in central Hong Kong and Beijing were up 8.7% and 8.6%, respectively, in the July-September period from the previous quarter, it said.

Investor sentiment remained buoyant in Shanghai and Beijing, underpinned by rental growth, with Asian buyers active despite a slew of tightening measures to cool the red-hot sector, according to the report.

"We are seeing rising interest from inter-regional investors, who are looking at the differential in growth rates between Asia-Pacific and the rest of the world," said Megan Walters, head of capital markets research for JLL.

However, limited availability of investment-grade assets would cap further increases in transaction volumes, she added.

She said some Asian countries had land ownership restrictions, particularly on foreign investors, and existing investors were unwilling to part with assets at prices buyers wanted to pay.

As a result, prices would trend higher in major cities in the region and yields would become compressed compared with mature markets such as London, Walters added.

"The alternative for investors in Asia will be to look at emerging markets and second-tier cities," she said. — Reuters
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