Positive sentiment translates into increased investment volumes across Asia-Pacific

KUALA LUMPUR: As economic conditions continue to grow more favourable, a rapid turnaround in sentiment and transactional activity can be seen. This has resulted in the return of domestic investors to the market to take advantage of the favourable pricing, said David Green-Morgan, head of Asia-Pacific research, DTZ.

DTZ reported in its latest investment volume research figures for Asia-Pacific that total commercial real estate investment transactions registered an estimated US$17.1 billion (RM59.19 billion) in 3Q2009, marking the third quarter-on-quarter (q-o-q) rise from the markets low point in 4Q2008, when volumes fell to just US$4.3 billion and putting the figures slightly over 50% in 2Q2009.

“Activity across the region continues to be driven by mainly private domestic purchasers, although a growing interest from the institutions is emerging. With debt markets only showing gradual signs of loosening, the majority of activity is centred towards lower lots (sub-US$100 million),” said Green-Morgan.

Most of the major markets showed an increase in volumes (US$ terms) over the quarter, notably in China, Australia, Hong Kong and Singapore albeit off relatively low levels with only Japan reporting a drop-off in activity. Japan had a strong 2Q, in which a deal in excess of US$1.2 billion was concluded.

Sentiments are turning positive as pricing stabilised, particularly in the prime end of the market, though investors are holding back on more secondary assets where re-pricing is continuing. This will likely keep a lid on activity in the coming quarters, said DTZ.