Asia-Pacific real estate investment market boosted by the wealthy (Sept 3, 2009)

KUALA LUMPUR: The real estate investment market in Asia Pacific will be boosted in the coming months by high-net-worth individuals, local companies and wealthy families as liquidity is expected to remain plentiful in the system, according to a quarterly bulletin released by Colliers International.

According to the Real Estate Investment Market Bulletin 2009, 2Q2009 saw an improvement in the real estate investment market, thanks to proactive liberalisation initiatives by governments in the region, while a global economic recovery is anticipated before the year end.

“Thanks to the concerted efforts of a number of central banks in the region to provide sufficient liquidity, the problem of the credit crisis eased further, while overall investment sentiment saw a distinct improvement in 2Q2009,” the bulletin says.

Measures undertaken notably by China, Taiwan and Vietnam include reducing the minimum capital ratio for property projects, allowing insurance companies to participate in property auctions and development, and amending housing laws respectively.

“More investors started jumping on the bandwagon based on expectations that the central government in China might relax the current restrictions on foreign real estate investments even further,” it adds.

Moreover, institutional investors are expected to return if there are signs of solid improvement in the occupational side of the market over the next six to 12 months. Savvy investment purchases by companies and wealthy private groups have foretold a global recovery on the horizon this year.

The greatest increase in sales activities were seen in Beijing, Hong Kong, Taipei, Singapore and Melbourne. Buying interest was concentrated mainly around office and residential property sectors.

“Office investment yields in the region edged down 19 basis points (bps) during 2Q2009, with Hong Kong seeing the most significant drop at 110 bps. In the residential sector, most centres in the region recorded a decrease of investment yields during 2Q2009. Hong Kong and Jakarta were the key performers compared with the average fall of 39 bps across the region,” the bulletin says.

According to a separate measurement undertaken by Real Capital Analytics, North Asia recorded the most number of office investment transactions valued at US$20 million (RM70.19 million) or higher in the 12 months, with Tokyo reaching US$9.2 billion and Seoul achieving US$3.3 billion.

Meanwhile, trading was also active in key cities located in the Greater China region. They registered a total volume of over US$1 billion during the same period.