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Shanghai tops favorite places in Asia for real estate investors

SHANGHAI became the top real estate investment destination in Asia Pacific in the fourth quarter of last year and clinched a No.5 global ranking for the whole year thanks to a steady stream of transactions at the end of 2016, according to international real estate services provider JLL.

The city's strong performance was driven by a number of high-profile transactions including ARA Asset Management's USUS$2.91 billion investment in the Century Link complex in October, the biggest single-asset property transaction in Asia Pacific last year.

New York, London, Los Angeles and Paris were last year's top four cities for real estate investment around the globe.

"With political upheavals such as Brexit and the surprising US election result, an increasing number of investors are looking at opportunities in Asia Pacific and specifically China," said Joe Zhou, head of research at JLL China. "Domestic capital was the main driver of real estate transaction volumes in 2016 and we believe China, particularly Tier 1 cities, will remain attractive to foreign investors as the market matures."

Notable real estate transactions in Shanghai last year included China Vanke Co's purchase of the SCPG Holdings Properties portfolio from Blackstone Group for US$1.9 billion and Chongbang Development's 80-percent equity stake buyback of Shanghai's Jinqiao Life Hub for US$825 million.

In Asia Pacific, real estate transaction volumes rose 5 percent last year and jumped 21 percent year on year in the fourth quarter of 2016, JLL's data showed.

Looking forward, the regional outlook for real estate investment remains positive this year with core markets such as Sydney, Tokyo and Singapore being attractive to investors, JLL said.


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