According to Colliers International, rebounding from the trough seen in 1Q2009, the region experienced a significant surge in sales transaction volumes during the second half of 2009. Compared with 2Q2009, the total turnover of real estate investment transactions in 4Q2009 increased 115% to US$8.840 billion (RM29.36 billion) in Greater China, and 259% to US$3.262 billion in South Asia.
“Greater China was the key contributor to the upsurge in market volume during the second half of 2009, despite a number of measures implemented by the Central Government to curb speculative purchases,” Colliers International’s chief executive officer, Asia, Piers Brunner said at a press conference on the Asia-Pacific real estate investment market on March 16.
He added that cash-rich investors could opt to keep property assets in their portfolio for recurring income.
Elsewhere in Asia-Pacific, the pace of recovery in terms of volume was generally slower than expected.
In Australasia, the overall volume in the second half of 2009 remained 50% below the levels seen before the financial crisis, due to rate hikes and sales withdrawals by individual vendors.
Amongst different property sectors, residential sector took the largest slice in the region.
The turnover of residential property investment transactions was US$5.29 billion in 4Q2009, registering a 116% increase from 2Q2009. In terms of growth rate in the second half of 2009, industrial property investment transactions recorded the steepest rebound, with a 253% rise in turnover from 2Q2009 to US$1.505 billion in 4Q2009.
“Despite the surge in both capital values and transactional volume during the second half of 2009, the leasing market has yet to catch up. This was reflected in the fall of investment yields in the region,” said Colliers International (Hong Kong)’s director of Research & Advisory Simon Lo.
He noted that comparing 2Q2009 with 4Q2009, the yields of the key property sectors, including office, residential, retail and industrial, in Greater China and South Asia, have registered falls of three to 100 basis points.
Property rentals continued to trend downwards during the second half of 2009 due to fragile occupational demand.
“In individual centres, higher-than-average vacancy rates in the secondary markets and plentiful new supply remain the challenges in their leasing markets,” said Lo.
“However, with the gradual economic recovery, together with real growth in real estate demand as a result of job growth and business expansion, the leasing market might hit bottom in the second half of 2010,” he added.
The prevailing positive market sentiment is expected to continue in 2010.
“There are some challenges in the market like sustained cap rates compression, further tightening of credit supply by governments, high-risk premium put in for real estate financing, etc,” said regional director of Asia Investment Sales, Antonio Wu.“However, western institutions’ allocations to Asia and Sovereignty Wealth Funds’ activities will serve as positive driving forces in Asia Pacific,” said Wu.
(From left) Brunner, Wu and Lo
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