Commercial real estate investment in the Asia-Pacific region saw a 28% year-over-year (YoY) increase in Q3 2024, reaching USD 38.8 billion (equivalent to approximately IDR 609.83 trillion at an exchange rate of IDR 15,717).
This represents the highest quarterly investment volume since the 2022 rate-hike cycle and marks four consecutive quarters of growth in the region.
According to global property consultancy Jones Lang LaSalle Incorporated (JLL), total investment volume in the Asia-Pacific region for the year to date (YTD) 2024 stands at USD 96.3 billion, up 82% compared to the same period in 2023.
Japan remains the most active market in Asia-Pacific, with Q3 trading volumes hitting USD 8.4 billion, driven by large-scale hotel portfolio acquisitions and record-high tourist numbers.
Singapore also performed strongly, with transaction values totaling USD 4.4 billion in Q3—up 118% from Q3 2023—fueled by high institutional investor demand for industrial and retail assets.
“There are multiple factors contributing to Asia-Pacific’s transaction volume in Q3, and we are optimistic that this trend will continue as borrowing costs in major regional markets are expected to decline,” said Stuart Crow, CEO of Asia Pacific Capital Markets at JLL.
Crow added that the region’s investment growth is set to persist, with property valuations in Asia expected to decrease further. JLL projects that 2025 will present a strong entry point for investors in the Asia-Pacific property market.
“Lower valuations will likely give early movers a competitive advantage with less competition from other investors,” he explained.
Most key property sectors, except residential, reported positive investment growth, with cross-border investments reaching USD 14.5 billion YTD—up 6% from the same period last year.
Office and Logistics Sectors Drive Growth in Asia-Pacific
This increase in cross-border investment is largely due to strong foreign investor interest in office and logistics assets across the Asia-Pacific.
According to JLL’s latest report, office and logistics markets contributed over half of the region’s total investment value, with Seoul and Tokyo emerging as primary players thanks to solid office market fundamentals.
“In Seoul, high demand has pushed rental growth beyond inflation, and there is now no grade-A office space left for 2025,” stated Stuart Crow.
In Tokyo, the grade-A office vacancy rate has approached -3%, and rental growth has seen three consecutive quarters of improvement in Q3.
The logistics sector is supported by large portfolio transactions, local and foreign investors are optimistic with Japan’s strong leasing prospects. In Australia, logistics transactions surged, particularly in strategic markets like Sydney and Melbourne.
Infrastructure investments, including data centers, renewable energy, and energy security projects, have also contributed positively to the region’s commercial real estate performance.
As of 2023, Asia-Pacific accounted for 70% of global renewable energy capacity, driving further funding into infrastructure sectors. In H1 2024, infrastructure-focused investments in Asia-Pacific totaled USD 13.2 billion, backed by major deals like KKR Asia Pacific Infrastructure Investors II at USD 6.4 billion.
“With inflation easing in the region and the Federal Reserve’s rate cuts in September, central banks in Asia-Pacific are likely to start their own rate-cutting cycles,” said Pamela Ambler, Head of Investor Intelligence at JLL Asia Pacific.
Real estate yields are expected to follow a similar trend, although long-term interest rates may stay higher than in the previous decade, requiring investors to remain vigilant to market responses.
“Asia-Pacific has also seen significant improvements in transparency, recording the highest average increase since 2022, which will attract more investment to the region,” Ambler added.
Source: marketing.co.id, kompas.com, ekonomi.bisnis.com
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