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Commercial real estate investment down 32% in Asia Pacific

JLL have delivered some not-so-surprising news: Commercial real estate investment across Asia Pacific fell by 32 per cent in the first half of 2020.

Investments were down 26 per cent during the first quarter, rising to 39 per cent in the second quarter, as travel bans, economic hardship, and lockdowns impacted the real estate market.

Singapore was the hardest hit in quarter two, down 68 per cent. Hong Kong and Australia also suffered second quarter falls of 65 per cent and 58 per cent respectively.

Japan and China both had impressive second quarters, only falling 20 per cent and 15 per cent.

“The sharp decline in deal activity in the second quarter is reflective of the lack of willing sellers and the general uncertainty that exists around market recovery,” said Stuart Crow, CEO, capital markets, Asia Pacific at JLL.

“Liquidity remains very high, and we expect transaction activity is poised to rebound in the second half as economies further reopen and pricing expectations are adjusted in certain markets.

“There is still significant uncertainty about growth and the shape of recovery amid the COVID-19 pandemic,” said Roddy Allan, chief research officer, Asia Pacific at JLL.

“Supply and demand remain the drivers of leasing performance and, inevitably, as markets continue to experience periods of lockdown, there is a direct impact on demand.

“The impact of COVID-19 will remain, but our research indicates investors will approach the market in the second half with measured optimism, which we believe will accelerate further in early 2021.”

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