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News Release

Four Asia Pacific Cities Feature in the Global Top Ten Cities for Real Estate Investment, 2012 Q1-Q3

Jones Lang LaSalle Releases Q3 2012 ‘Global Capital Flows’ Real Estate Investment Report


singapore, 2 November 2012 – Direct investment in commercial real estate in Q3 2012 in Asia Pacific was US$22.4 billion, according to Jones Lang LaSalle’s latest Global Capital Markets Research. This compares to US$26 billion in the second quarter and is in line with Q3 2011 when US$23 billion was transacted.

 

According to the firm’s new Global Capital Flows report, year to date volumes in Asia Pacific this year are in line with 2011 numbers; with US$71 billion transacted in the first three quarters of 2011 and US$70 billion this year to date. Four of the most active cities in the first three quarters of 2012 were in Asia Pacific: Tokyo, Hong Kong, Seoul and Singapore.

 

Globally there was US$100 billion of direct investment in commercial real estate in Q3 2012, a dip of around 6-7 percent when comparing quarter on quarter, Q3 2012 to Q3 2011 and also when comparing the first nine months of this year to last. In Q3 the Americas accounted for US$44 billion and EMEA US$33 billion.

Stuart Crow, Head of Asia Pacific Capital Markets, Jones Lang LaSalle said: “While transaction activity has slowed in some markets around the region due to subdued economic growth forecasts, transaction volumes in Australia improved 17 percent year on year on the back of higher yields. China remains very active, as does Hong Kong and Japan, and we see the strong REIT markets supporting further activity across the region. At the same time, large global sovereign and pension funds are returning their focus to Asia Pacific and we maintain our expectation for full year 2012 volumes in Asia Pacific to reach US$88 billion, compared with US$98 billion in 2011.”

Cross Border Investment

Cross border purchasers accounted for US$3.7 billion of transactions during the quarter in Asia Pacific, or 16 percent of total investment in the region. Of this cross border investment, US$2.3 billion came from purchasers outside of Asia Pacific. This was buoyed by a large investment of US$1.04 billion from the Canadian Pension Plan Investment Board (CPPIB) into the Barangaroo mixed use project in Sydney.

There has been a slowdown in investment activity into Asia Pacific from European investors. Capital outflows by European investors have exceeded their capital inflows into Asia Pacific so far this year.  There were four Asia Pacific cities in the top ten largest recipient cities globally of cross border investment year to date: Sydney, Hong Kong, Tokyo and Shanghai. Whilst Sydney and Tokyo have seen more investment this year to date compared to last year, the volume of cross border capital that flowed into Hong Kong and Shanghai fell. There were three Asia Pacific countries in the top ten cross border purchasers year to date, Singapore, Malaysia and China.

Alistair Meadows, Director, International Capital Group Asia Pacific at Jones Lang LaSalle said: “Activity between regions continues to be characterised by larger lot sizes involving pension and sovereign wealth funds that are active globally for the first time due to the relaxation of restrictions on cross border investment. Asian local buyers are taking up the deals being exited by Europeans and Asian capital continues to flow out of the region looking for core assets in key gateway cities globally. Asian funds continue to like buying in London in particular.”

Stand out deals in Q3 included Korea Life purchasing an office asset in the City of London, a consortium involving Stanhope backed by the Alberta Investment Management Corporation (AIMCO) and Mitsui Fudosan buying the BBC Television Centre in London as a redevelopment opportunity, whilst Malaysia’s KWAP and a consortium of South Koreans both recently purchased office buildings for £200 million and £150 million respectively.

– en​ds –

 

Notes to Editors

1. Jones Lang LaSalle’s Global Capital Flows analysis provides a set of data designed to help investors understand how commercial real estate capital is moving around the world. The findings are released quarterly, first in the transaction volume analysis represented in this release, and secondly in a broader quarterly report which will be issued in the following weeks. All of the current Global Capital Flows data can be found in an interactive website which also acts as a portal for media and clients to access Jones Lang LaSalle’s global capital markets research. Bookmark this site for the most up to date global real estate data: http://www.joneslanglasallesites.com/gcf

2. View the Global Capital Flows Infographic

3. For an overview on Q3 Global Capital Flows with David Green Morgan, Global Capital Markets Research Director, Jones Lang LaSalle view our podcast

4. Data tables


Global Commercial Real Estate Direct Investment Volumes by region (US$ billion)

 

Year

Americas

EMEA

Asia Pacific

Total

2003

176

150

27

353

2004

185

161

46

392

2005

216

196

67

479

2006

283

322

95

700

2007

304

333

121

758

2008

126

167

85

378

2009

45

98

66

209

2010

97

138

85

320

2011

155

166

98

418

2012*

126

98

70

295

 

Source: Jones Lang LaSalle

* 2012 year to date

 

Most Active Cities Globally                                            Most Active Cities in Asia Pacific

2012 Q1-Q3 (US$ billion)                                                2012 Q1-Q3 (US$ billion)

 

City

Q1-Q3 2012

 

City

Q1-Q3 2012

London

21.8

 

Tokyo

9.9

New York

13.1

 

Hong Kong

6.7

Tokyo

9.9

 

Seoul

6.5

Paris

9.8

 

Singapore

5.8

Los Angeles

7.2

 

Shanghai

4.1

Hong Kong

6.7

 

Sydney

3.8

Seoul

6.5

 

Taipei

3.4

Singapore

5.8

 

Guangzhou

3.1

San Francisco

5.5

 

Brisbane

2.3

Washington, DC

5.2

 

Beijing

1.9

 

Source: Jones Lang LaSalle                                                                          Source: Jones Lang LaSalle