Commercial real estate investment in Asia Pacific reached USD25.4 billion in Q2, an increase of 9% from Q1. This brought volume in first half to USD48.8 billion, 3% higher than the same period last year. Investment activity was buoyant across most markets in the region, led by a doubling of quarterly investment in Australia, Hong Kong and tripling in South Korea. Q2 saw a post-crisis record share of overseas investment driven by unlisted funds and institutional investors, reflecting renewed foreign interest in the region s real estate market. DTZ expects investment volume in 2014 to be broadly in line with the record level achieved in 2013.
Commercial real estate investment activity (excluding land sales) in Asia Pacific reached USD25.4 billion in Q2, an increase of 9% from Q1 and on par with the level in Q2 2013. This brought investment volume in the first half of 2014 to USD48.8 billion, up 3% from the same period last year.
Investment activity was buoyant across most markets in the region, with the increase in activity led by Australia, where transaction volume doubled quarter-on-quarter (q-o-q) to USD8.2 billion. This was underpinned by the takeover of Commonwealth Property Office Fund (CPA) by the Canadian-based CPPIB and DEXUS A-REIT. As a result of a strong influx of foreign capital, volume in South Korea increased threefold to USD2 billion. As part of this capital inflow, the State Oil Fund of Azerbaijan (SOFAZ) and the Hong Kong-based real estate private equity firm Gaw Capital Partners made their first forays into the South Korean market.
The Greater China region, comprising China, Hong Kong and Taiwan, experienced a 66% uplift in investment in Q2 q-o-q, with volume 45% higher than the same period a year ago. Andrew Ness, Head of North Asia Research, commented: We saw a broad-based increase in activity across the region. In Hong Kong, disposals of several en-bloc offices in newly emerged Kowloon East commercial districts drove up investment volume sharply by 133% q-o-q to USD2.2 billion. Volume in China increased by 32% q-o-q to USD3.0 billion, with almost one-third of the volume coming from the purchase of Pacific Century Place, a mixed use complex in a prime location in Beijing s Chaoyang District. Taiwan also recorded a jump of 140% q-o-q to USD0.4 billion due to strong owner occupier demand across all major property types.