Asia Pacific Property Investment Up 20 Percent in Q1/2022

property investment

The property business sector has been sluggish for the past two years due to the Covid-19 pandemic that hit the world. Now, after several countries have begun to control the pandemic, the property investment business has found its passion again.

Property consultant JLL said that property investment growth in the Asia Pacific in the first quarter of 2022 experienced an increase of 20 percent on an annual basis.

Based on data from JLL Capital Tracker for the first quarter of 2022, direct investment in the property sector reached US$40.8 billion during the first quarter with an increase in investment volume clearly visible in several countries such as Singapore, South Korea, and Australia.

By sector, investment in the retail and office sectors grew strongly, while the logistics and industrial sectors experienced moderate growth of 3.5 percent on an annual basis.

JLL’s Chief Executive Officer Capital Markets Asia Pacific, Stuart Crow said, “Investors continue to diversify their investments in the Asia Pacific region, marked by the pace of investment in retail, office assets, and high investment growth in Singapore, Korea, and Australia.

“We are optimistic that the real estate sector in the region [Asia Pacific] will be able to withstand the pressures of rising interest rates and increasing uncertainty. We still see intense competition for several assets and that direct investment could reach over US$200 billion in the Asia Pacific region during 2022,” Crow said in a written statement, quoted Wednesday (25/5/2022).

Chow said Singapore’s commercial properties experienced the highest investment growth in the first quarter, increasing by 134 percent year-on-year (YoY) to US$5.7 billion, driven by transactions in the office and retail sectors.

Based on the report, Japan is the largest investment market in the Asia Pacific region with an investment value of US$8.5 billion despite an annual decline of 26 percent.

Furthermore, South Korea experienced positive growth in the first quarter, with investment increasing by 89 percent year-on-year to US$8.2 billion, supported by diversification of investment in the office, retail and logistics, and industrial sectors.

Meanwhile, China in 2022 recorded an investment volume of US$8.3 billion, although it stagnated in the first quarter.

Meanwhile, Australia recorded the third-largest annual investment growth of 49 percent in line with the injection of investor capital of US$4.7 billion into the property market, especially in the office sector.

It is known, that the office is still the most popular sector in the Asia Pacific. This can be seen from the volume of direct investment which grew 9 percent (YoY) to US$17.3 billion during the first quarter. Driven by rental business and high demand.

Meanwhile, activity in the logistics and industrial sectors rose 3.5 percent (YoY), but the pace of growth was moderate, with investment fund gains of US$8.3 billion in the first quarter. The absence of significant portfolio transactions is the reason for the slow growth of investment in this sector, despite the great interest of investors. Key transactions include the sale of the DLJ Greater Shanghai Portfolio worth US$717 million in China.

Investment transactions in the hotel sector reached US$3.1 billion with many hotels changing ownership and some investors trying to profit from price differences or changing many hotel assets that did not generate profits.

JLL expects the hotel sector to rebound further in 2022, with a forecast of US$10.7 billion in full-year transactions, a 15 percent increase over 2021.