Commercial real estate deals in Singapore crashed 42% to $1.2b

Will volumes pick up soon?

According to JLL, following a record year in 2013, transaction volumes in Asia Pacific’s commercial real estate markets slowed to US$23.1 billion in the first quarter of 2014, down 15 percent year-on-year.

Attributing the slowdown to government cooling measures and various seasonal factors, JLL maintains its forecast that full year transaction volumes will surpass those in 2013 as a result of the continued allocation of capital to the real estate sector and improving leasing demand.

Here's more from JLL:

Outperforming the rest of the region, transaction volumes in the larger markets of Japan and Australia grew by 15 percent and 31 percent respectively, with Japan accounting for an impressive 53 percent (US$12.2 billion) of direct investment into the region’s commercial real estate markets in the first quarter of the year. What is traditionally a strong quarter for Japan’s investment markets was buoyed further by the increase in the country’s consumption tax on 1st April, which meant many investors deliberately brought deals forward.

Portfolio transactions and foreign investors played a prominent role in Japan’s regional outperformance during the first quarter of 2014 with a number of large mega-deals boosting overall volumes. Whilst the consumption tax rise could slow investor appetite over the short-term, the general trend in Japan remains positive in both liquidity and transaction volumes with the market set to experience further strong growth in 2014.

In Q1 2014, transaction volumes in Singapore declined by 42 percent to reach US$1.2 billion. However, with a number of large en-bloc assets coming to the market, a healthier rental market and improved investor sentiment, volumes are set to pick up during the remainder of the year.