JLL: the volume of real estate investments in Asia-Pacific increases by 30% year-on-year in 9M2021

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KUALA LUMPUR (October 22): Real estate investment volumes in Asia-Pacific continued to rebound strongly in the first nine months of 2021, up 30% compared to the same period in 2020.

According to the recently released “Capital Tracker Q32021” report by global real estate advisor JLL, direct real estate transactions in Asia-Pacific to date have grossed US $ 125 billion (RM 519 billion), just 6% lower than 2019 levels, with investors deploying capital in more income-resilient assets, such as the office and logistics sectors.

In the third quarter alone, real estate investments in Asia-Pacific amounted to US $ 39.5 billion, an increase of 10% year-on-year (year-on-year). However, transactions were down 23% quarter-on-quarter as several regional economies were affected by the Covid-19 resurgence and subsequent restrictions on movement and activities.

“Despite continued unpredictability, our interactions with clients reaffirm both the attractiveness and resilience of the commercial real estate industry in Asia Pacific. Throughout 2021, investor interest in the region has remained extremely high as capital becomes more active and volumes approach pre-pandemic levels in the region, which is expected to continue into the fourth quarter ” said Stuart Crow, CEO of JLL Asia Pacific’s Capital Markets.

In the third quarter of 2021, office investment continued to recover, representing 55% of transactions, supported by the stabilization of rents and occupancy rates. At the same time, logistics transactions continue to climb, with investments over the past 12 months reaching US $ 43 billion, up from US $ 25 billion in 2019.

Meanwhile, JLL predicted that logistics investments would double to $ 50 billion to $ 60 billion between 2023 and 2025, thanks to favorable demand drivers, attractive yield spreads and a desire for diversification.

“Malaysia continues to be one of the favorite places to build data centers in the SEA region. We anticipate that further developments of this type will occur in the near future since the Malaysian government launched the MyDigital initiative allowing the rakyat to embrace digitization and thereby improve the quality of life ”, JLL Property Services (M) Sdn Bhd country leader YY Lau (photo) it is noted.

On the other hand, investments in retail and hotels have been low as the economic recovery in the region has been delayed due to the Covid-19 outbreaks. Hotel investment volumes are expected to exceed US $ 7 billion for the whole of 2021, reaching US $ 9 billion in 2022, JLL estimated.

“We expect portfolio reallocation to remain a major theme through 2022, as investors face stiff competition for income-resilient assets, including office and logistics, as well as more specialized sectors such as self-catering. -storage, residences and data centers.

“Overall investor sentiment remains positive and we maintain our view that investment volumes will increase by 15-20% in 2021 with a further recovery expected in 2022,” said Regina Lim, Head of Investment Markets. capital of JLL Asia Pacific.

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