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Funds in Asian realty up 56%
By Cao Qian |
February 5, 2010, Friday
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Print Edition
Print Edition
DIRECT real estate investment in Asia jumped 56 percent in the second half of 2009 to an estimated US$25 billion and more than half was from China, a major real estate services provider said yesterday.
Major property deals concluded in China, including Hong Kong and Taiwan, soared 169 percent year on year to US$15 billion during the six-month period, according to the latest industry report released by CB Richard Ellis.
Improved investor confidence, underpinned by the rebound in equity markets, low financing costs as well as a stabilizing trend in price levels across key markets, led to the strong recovery in the second half of 2009 after a difficult start to the year.
"Investment volume and prices across most sectors, particularly in the residential and office markets, have increased considerably," said Andrew Ness, executive director of CBRE Research Asia.
"However, there are concerns that a number of residential markets appear to be in the early stages of transitioning from a state of recovery to a situation where they are in danger of overheating due to the high liquidity and a surge of capital inflows to the region."
Investment activity was largely driven by other countries' domestic and intra-regional investors, which each accounted for 83 percent and 15 percent of the total volume, though a small number of core international institutional investors are also returning to the Asian property market, the company said.
Prime office properties continued to attract the most interest, accounting for more than US$10 billion of investment, or 41 percent of the total volume, between July and December, immediately followed by residential and retail properties, accounting for 20 percent and 16 percent each.
Despite the strong rebound in the second half of last year, analysts do feel concerned about whether the current recovery could be sustained as it's mainly driven by liquidity due to the monetary easing policies implemented by Asian governments during the financial downturn.
Major property deals concluded in China, including Hong Kong and Taiwan, soared 169 percent year on year to US$15 billion during the six-month period, according to the latest industry report released by CB Richard Ellis.
Improved investor confidence, underpinned by the rebound in equity markets, low financing costs as well as a stabilizing trend in price levels across key markets, led to the strong recovery in the second half of 2009 after a difficult start to the year.
"Investment volume and prices across most sectors, particularly in the residential and office markets, have increased considerably," said Andrew Ness, executive director of CBRE Research Asia.
"However, there are concerns that a number of residential markets appear to be in the early stages of transitioning from a state of recovery to a situation where they are in danger of overheating due to the high liquidity and a surge of capital inflows to the region."
Investment activity was largely driven by other countries' domestic and intra-regional investors, which each accounted for 83 percent and 15 percent of the total volume, though a small number of core international institutional investors are also returning to the Asian property market, the company said.
Prime office properties continued to attract the most interest, accounting for more than US$10 billion of investment, or 41 percent of the total volume, between July and December, immediately followed by residential and retail properties, accounting for 20 percent and 16 percent each.
Despite the strong rebound in the second half of last year, analysts do feel concerned about whether the current recovery could be sustained as it's mainly driven by liquidity due to the monetary easing policies implemented by Asian governments during the financial downturn.
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