Singapore ranked Asia Pacific's 3rd biggest in investment volume

A huge rise of 358% growth in investment volumes was recorded for Singapore. According to Jones Lang LaSalle's Capital Markets Bulletin, this growth came from several large transactions in 3Q10.

Investment volumes are increasing in the Asia Pacific region and Singapore is now the third biggest market behind Japan and Australia. Direct commercial property transaction volumes for Asia Pacific amounted to USD 18.2 billion in 3Q10.

Stuart Crow head of Asia Pacific capital markets said, “As the market continues to stabilise, we are seeing more and more investors looking to pursue transactions. We will continue to see a further increase in these volumes to the end of this year, but the number of buyer’s versus sellers is likely to come back to more realistic levels next year.”

The report states that investors are likely to continue to be attracted to assets that offer good inflation protection by allowing continuous re-pricing of income streams, hotels and residential assets. Retail assets have been popular with investors in 2010, usually accounting for around 17% of total investment deals but this year reaching about 22%, this may be expected to continue into next year.

Dr Megan Walters head of research for Jones Lang LaSalle capital markets said, “we are seeing a rising interest from inter-regional investors who are looking at the differential in growth rates between Asia Pacific and the rest of the world. However, the constraint to increasing Asian investment volumes will be the limited availability of investment-grade assets. This is in part from the restrictions on land ownership place in some countries in Asia, for example on foreign ownership, and in part from existing investors unwilling to part with their hard-won Asian assets at a price buyers want to pay.”

“The outcome may be continued upward pressure on pricing up in major Asian cities, as yields become compressed compared to what one can achieve in mature markets such as London. The alternative for investors in Asia will be to look at the emerging markets and second tier cities. Next year’s investment volumes for Asia Pacific are estimated at around US$88bn, broadly 15% above the likely 2010 total volumes.” Dr Walters said.