Shanghai tops Tokyo as Asia’s property investment destination of choice

CNBC: The Chinese city of Shanghai has become the top destination for real estate investment in Asia Pacific, squeezing out Tokyo from the number one spot in the fourth quarter of last year, according to data from JLL.

According to the real estate investment manager, Shanghai’s strong performance was driven by large transactions including ARA Asset Management’s US $ 2.91 billion investment in the Century Link complex in October, which was the biggest single-asset property transaction in Asia Pacific in 2016.

In the retail sector, the largest transaction of the year was Chongbang Development’s US $ 825 million buyback of an 80 percent equity stake in Shanghai’s Jinqiao Life Hub.

Other high-profile deals included the SCPG Holdings Properties portfolio that purchased by China Vanke from the Blackstone Group for US $ 1.9 billion.

“Domestic capital was the main driver of real estate transaction volumes in 2016, with domestic investors often outbidding foreign investors in many transactions. We believe that China — particularly Tier I cities — remains attractive to foreign investors as the market matures,” JLL’S head of research for China, Joe Zhou, said in a statement.

Globally, Shanghai was in the fifth spot after New York, London, Los Angeles and Paris last year. Beyond cities, total real estate transaction volumes in Asia Pacific grew by five percent in 2016 and by 21 percent in the fourth quarter from a year ago, according to JLL.

“With political upheavals such as Brexit and the surprising US election result, an increasing number of investors are looking at opportunities in Asia Pacific and specifically China,” Zhou added.

Real estate transaction volumes in the fourth quarter of last year totaled US $ 15.5 billion in China, US $ 7.4 billion in South Korea and US $ 7.2 billion in Japan.