2016: An ac­tive year for Asian in­vest­ment

To­tal in­vest­ment vol­umes in Sin­ga­pore were boosted by the largest sin­gle trans­ac­tion in Asia last year, the landmark sale in Q2 of Asia Square Tower 1 to the Qatar In­vest­ment Au­thor­ity for over S$3b.

Singapore Business Review - - ANALYSIS: ASIAN PROPERTY -

Whilst in­ter­est in Asian prop­erty from in­vestors based out­side the re­gion re­mains mod­est, in­tra-re­gional in­vest­ment has been very strong. Based on RCA data, ag­gre­gate in­tra-re­gional prop­erty in­vest­ment in Asia reached US$69.3B in 2016, a 34% in­crease from US$52.9B in 2015. The sta­tis­tics from RCA match the ev­i­dence from other sources that 2016 was a very ac­tive year in Asian prop­erty in­vest­ment mar­kets.

Per­haps the chief point to note is that prop­erty trans­ac­tion vol­ume in China has strength­ened sig­nif­i­cantly. In fact, as mea­sured by to­tal prop­erty trans­ac­tion vol­umes ex­clud­ing un­de­vel­oped land,

China has over­taken Ja­pan to be­come the re­gion’s top coun­try in­vest­ment mar­ket. Ja­pan’s sta­tus over many years as the Asia Pa­cific re­gion’s top prop­erty in­vest­ment mar­ket re­flects Tokyo’s po­si­tion as Asia’s largest sin­gle ur­ban prop­erty mar­ket. How­ever, prop­erty trans­ac­tion vol­umes in Ja­pan fell by 37% in 2016 to US$29B as a con­se­quence of a slug­gish econ­omy (one of the weak­est in Asia at present) and the strength of the Ja­panese yen last year, which de­terred for­eign in­vest­ment. The de­cline in in­vest­ment ac­tiv­ity ac­cel­er­ated in Q4 2016, which saw a 68% drop in in­vest­ment to US$4.2B.

By con­trast, over 2016 as a whole to­tal prop­erty trans­ac­tions in China in­creased by 10% to US$36.5B, thereby just ex­ceed­ing the level in Ja­pan. This strength ac­cel­er­ated in Q4, which saw a 32% year-on-year in­crease in trans­ac­tion vol­umes to US$14B. For 2016 as a whole, China ac­counted for 28% of ag­gre­gate prop­erty trans­ac­tions in the re­gion, whilst for Q4 2016 the pro­por­tion was 35%.

Be­sides China, Hong Kong and Sin­ga­pore en­joyed very ac­tive in­vest­ment in­ter­est in 2016.

Strong in­vest­ment in­ter­est

Be­sides China, Hong Kong and Sin­ga­pore en­joyed very ac­tive in­vest­ment in­ter­est in 2016. In Hong Kong’s case, to­tal prop­erty trans­ac­tion vol­umes in­creased by 15% over the year to US$13.5B, on which ba­sis Hong Kong ranked as the fourth largest coun­try in­vest­ment mar­ket in Asia Pa­cific. In Sin­ga­pore’s case, to­tal prop­erty trans­ac­tion vol­umes in­creased by 38% over the year to US$8B, on which ba­sis Sin­ga­pore ranked as fourth largest coun­try in­vest­ment mar­ket in Asia Pa­cific.

To­tal in­vest­ment vol­umes in Sin­ga­pore were, of course, boosted by the largest sin­gle trans­ac­tion in Asia last year, the landmark sale in Q2 of Asia Square Tower 1 to the Qatar In­vest­ment Au­thor­ity for SG$3.38B (US$2.43B). How­ever, in­vest­ment ac­tiv­ity re­mained strong in H2, with 44% yoy growth in Q4 to US$3.2B.

As an ur­ban cen­tre rather than a coun­try, Hong Kong ranked as the third largest in­vest­ment mar­ket in 2016 in the Asia Pa­cific re­gion af­ter Tokyo and Shang­hai, whilst Sin­ga­pore ranked sixth. How­ever, per­haps the big­gest sur­prise in the re­gion was Seoul, which saw a 142% in­crease in to­tal trans­ac­tion vol­umes to US$9.92B, and on

Prop­erty trans­ac­tion vol­ume in China has strength­ened sig­nif­i­cantly

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