According to Colliers International’s Capital Markets and Investment Services Asia Market Snapshot, economic acceleration coupled with China’s increasing investment into Southeast Asia has resulted in robust demand for investment property across the region in the third quarter, a trend which is likely to continue for the remainder of the year. 

Terence Tang, Managing Director of Capital Markets and Investment Services for Colliers International, Asia, commented: “We have seen increased deal volumes in the major markets of Hong Kong, Singapore and Shanghai, as well as strong activity across the office, residential and hospitality sectors, which is an encouraging sign for the rest of the year. As the focus of Chinese investment continues to shift from the US to Asia, we are seeing signs of increased capital flows into the Belt & Road markets of Southeast Asia, with markets like Vietnam already seeing strong inbound interest from Chinese investors. Belt & Road investment will also benefit China domestically, with the upcoming Chengdu-Europe Express, and the logistics sector and residential development sites are already experiencing increased activity this quarter.”

Hong Kong performed strongly in Q3, with a number of large ticket size deals offered in the market and a huge total of 222 en-bloc transactions. Industrial and logistics was the strongest performing sector, with HKD10 billion (USD1.28 b) in deal value transacted in Q3. This sector should maintain upward momentum, driven by the expected reboot of the industrial revitalisation policy following Carrie Lam’s inauguration.  

It was an extraordinary Q3 in Singapore for both the commercial and residential sectors with very significant transactions concluded in both. It signifies the bottoming of the market and return of investor confidence in the country’s performance and multi-year growth. The SGD2.09 billion (USD1.54 b) sale of Asia Square Tower 2 is the year’s biggest office property deal across Asia, while several residential sites and residential government land sales were also concluded. Collective sales fever is expected to dominate transactions for the rest of the year. 

Shanghai recorded robust investment activity across all sectors in Q3, ranking third in RCA data for transaction volume in Asia for 1H17. USD1.4 billion in value over 8 en-bloc transactions were concluded in the third quarter, all by domestic investors, 5 of which were office buildings or mixed-used projects with sizable office components. We expect dynamic movement in office sector during Q4 from both domestic and foreign capital sources with good, long-term investment opportunities, as well as positive markets for serviced apartments and business parks. 

The hotel sector remained in high demand, from large sized deals in Hong Kong to the healthy demand for hospitality assets in Vietnam’s main cities and attractive coastal locations. 

The industrial sector was one of the best performing sectors across the region, with 1,496 industrial properties changing hands in Hong Kong, increased investment in decentralised locations in Vietnam and a boost in the logistics and warehouse markets in Chengdu due to the International Railway Port and Freetrade Zone.

Beijing and Shanghai are seeing a surge in office and business parks activities in both CBD and DBD areas, due to government policies aimed at attracting Foreign Direct Investment for the former and a strategic geared move to become a global science and innovation centre for the latter.

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