Regional investment volume of US$109.8 billion in the first quarter grew 50.2% compared to the last quarter of 2012 and is 22.9% higher from the same period a year ago, with investments into both core and emerging markets increasing.
According to recently released Capital Markets MarketBeat reports by Cushman & Wakefield, the world’s largest privately owned real estate company, total first-quarter investments into core countries more than doubled from the fourth quarter last year, but was about stable when compared to the same period last year at just 7% higher. In contrast, investments into emerging markets totalling US$22.6 billion, which were up by more than a fifth from the last quarter of 2012 but on a year-on-year basis, volumes were up by over 30% from a year ago. Emerging markets has seen a step-up in activity, largely traceable to the uptick in the sales of development land sites.
John Stinson, Managing Director, Asia Pacific Capital Markets at Cushman & Wakefield commented: “The APAC region remains a real target for investors. The outlook for China, especially in the core market of Shanghai is positive with investors looking at office and retail assets. In the emerging markets space, Southeast Asia continues to be favourable, with strong economic growth prospects and government investment programmes as well as committed measures at structural reforms”, “We expect investment volumes in emerging markets to rise this year”.
Cross border investments in the region was subdued, making up about 7.6% of total investments, down from the 12.9% in the previous quarter and 10.8%in the first quarter of last year. Notably, foreign inflows into Malaysia this quarter have already surpassed the annual totals for each of the past four years; US$630.9 million, or 95.7%, was invested into land sites in the Iskandar region.
Prospects for sustained investments into real estate remain positive for the region. According to Morningstar, global real estate stock funds have risen by about 7% this year and allocation to global real estate has gained traction, with investors reportedly looking for building opportunities in the region.