Investment volumes were up 62% quarter-on-quarter in Australia and up by 12% in Asia Pacific following optimistic investor sentiment
New research from Jones Lang LaSalle’s capital markets division is showing improving investment levels across Asia Pacific’s property markets, off the back of optimistic business sentiment, resurging investor confidence and strong economic fundamentals.
Direct commercial real estate investments in Australia in Q3 were up 62% quarter-on-quarter, totalling AUD 3.5 billion in 3Q10, compared to AUD 2.16 billion in 2Q10. Asia Pacific totalled US$18 billion in the third quarter, a 12% increase on Q2 according to Jones Lang LaSalle.
When comparing the third quarter results for this year with Q3 results in 2009, the preliminary figures show that Australia has seen an increase of 31% in total direct commercial real estate transactions over the same period last year.
Managing Director, Investments and Advisory in Australia, John Talbot said third quarter investment sales included the major sale of the Direct Factory Outlet centres at a total value of AUD498 million to Colonial First State Retail Property Trust, a deal negotiated by Jones Lang LaSalle
“The DFO sale and the acquisition this week by Dexus of Colonial’s Industrial portfolio, the largest industrial deal this year which was negotiated by Jones Lang LaSalle for a sale price of $231 million, have provided the market with greater clarity around buyer depth and asset pricing.
“These transactions also demonstrate that Australian institutions are back and looking for the right product for their investment strategies.
“The strong recovery in sales volume in 2010 largely reflects much stronger sentiment and buyer depth at the larger end of the investment market, both domestically and from offshore groups.
“With Australian debt markets also starting to recover, we can expect to see a lot more investment activity in the fourth quarter and into 2011,” Mr Talbot said.
Stuart Crow, head of Asia Pacific capital markets for Jones Lang LaSalle comments, “With a number of significant transactions expected this quarter and buoyed by positive business sentiment, market fundamentals continue to improve in the region. It is expected that we will see continued enthusiasm for real estate by investors expecting a low interest rate environment and an increase in portfolio deals as the investment market continues to grow.”
Dr Megan Walters, head of research for Asia Pacific Capital Markets for Jones Lang LaSalle said “Capital values continued to climb across most of the region in Q3. An increase in institutional acquisitions (en bloc transactions) has been observed and it is expected that more will follow suit although funds may be selective for assets.”
Cross border transaction volumes rose 23% quarter on quarter in Asia Pacific reaching US$5 billion in Q3, with Australia seeing close to a 110% year on year increase in cross border transaction volumes. Looking ahead, Jones Lang LaSalle anticipates that transaction volumes in Asia Pacific will show an increase of 15 to 25% over 2009 figures, reaching the US$77 billion mark approx. by the year end.
New research from Jones Lang LaSalle’s capital markets division is showing improving investment levels across Asia Pacific’s property markets, off the back of optimistic business sentiment, resurging investor confidence and strong economic fundamentals.
Direct commercial real estate investments in Australia in Q3 were up 62% quarter-on-quarter, totalling AUD 3.5 billion in 3Q10, compared to AUD 2.16 billion in 2Q10. Asia Pacific totalled US$18 billion in the third quarter, a 12% increase on Q2 according to Jones Lang LaSalle.
When comparing the third quarter results for this year with Q3 results in 2009, the preliminary figures show that Australia has seen an increase of 31% in total direct commercial real estate transactions over the same period last year.
Managing Director, Investments and Advisory in Australia, John Talbot said third quarter investment sales included the major sale of the Direct Factory Outlet centres at a total value of AUD498 million to Colonial First State Retail Property Trust, a deal negotiated by Jones Lang LaSalle
“The DFO sale and the acquisition this week by Dexus of Colonial’s Industrial portfolio, the largest industrial deal this year which was negotiated by Jones Lang LaSalle for a sale price of $231 million, have provided the market with greater clarity around buyer depth and asset pricing.
“These transactions also demonstrate that Australian institutions are back and looking for the right product for their investment strategies.
“The strong recovery in sales volume in 2010 largely reflects much stronger sentiment and buyer depth at the larger end of the investment market, both domestically and from offshore groups.
“With Australian debt markets also starting to recover, we can expect to see a lot more investment activity in the fourth quarter and into 2011,” Mr Talbot said.
Stuart Crow, head of Asia Pacific capital markets for Jones Lang LaSalle comments, “With a number of significant transactions expected this quarter and buoyed by positive business sentiment, market fundamentals continue to improve in the region. It is expected that we will see continued enthusiasm for real estate by investors expecting a low interest rate environment and an increase in portfolio deals as the investment market continues to grow.”
Dr Megan Walters, head of research for Asia Pacific Capital Markets for Jones Lang LaSalle said “Capital values continued to climb across most of the region in Q3. An increase in institutional acquisitions (en bloc transactions) has been observed and it is expected that more will follow suit although funds may be selective for assets.”
Cross border transaction volumes rose 23% quarter on quarter in Asia Pacific reaching US$5 billion in Q3, with Australia seeing close to a 110% year on year increase in cross border transaction volumes. Looking ahead, Jones Lang LaSalle anticipates that transaction volumes in Asia Pacific will show an increase of 15 to 25% over 2009 figures, reaching the US$77 billion mark approx. by the year end.
