AsiaPac real estate investment volumes reach an amazing US$20b in 3Q11

Transaction volumes rose 8% from last quarter, according to Jones Lang LaSalle.

Global direct real estate investment volumes in the third quarter of 2011 totalled US$99 billion, up 36 percent on the same period in 2010, according to figures released today by Jones Lang LaSalle. In the first nine months of 2011, investment activity increased by 43 percent, with total transaction volumes amounting to US$297 billion, compared to US$208 billion in the same period last year.

In Asia Pacific, transaction volumes amounted to $US20 billion in the third quarter. This represents an eight percent rise on the previous quarter, and a three percent increase on the third quarter 2010. The deal volume for China’s direct commercial property investments rose to approximately $US2.8 billion, up 13 percent on last year. Japan the largest Asian market, saw volumes rise to over $US4.7 billion, in line with the same quarter in 2010, as the markets recovered following the tsunami and earthquake earlier in the year.

Arthur de Haast, Head of the International Capital Group at Jones Lang LaSalle said: “Real estate fundamentals remain relatively strong and the asset class has gained favour compared to equities and bonds. However, debt finance is harder to come by than earlier in the year, and the expected growth in interest in secondary product has stalled as investors take refuge in core, well-let product in specific markets. The market remains very much sentiment-driven and the mood is cautious, resulting in delays in closing deals and volatility in transaction volumes quarter-on-quarter.

In the context of the sovereign debt crisis and wider economic growth concerns, we feel that there is a possible downside of up to 10 percent against our original estimated volumes for 2011of $US440 billion.”