Singapore's commercial property transaction volumes plunged 42% to US$1.2b

See how its Asian peers fared.

According to JLL, its latest figures show direct investment into Asia Pacific’s commercial real estate markets slowed in Q1 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.

JLL noted that 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, according to the latest figures from JLL.

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.

Stuart Crow, head of Asia Pacific capital markets at JLL said, “Transaction volumes in Asia Pacific are traditionally lower in the first quarter than the rest of the year as the region experiences the effects of both the Western and Chinese New Year holidays. 

While investment has been slightly muted by concerns around growth in emerging markets and renewed economic uncertainty in China, we expect transaction volumes to pick up throughout the year as a wave of closed-end funds mature and deals that are already in the pipeline come to market. Coupled with unrelenting demand for commercial real estate, this leads us to maintain our forecast that investment in commercial real estate in the region will outstrip that of 2013.”

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.