Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • Mingtiandi 2022 Event Calendar
    • APAC Residential Forum 2022
    • Asia Logistics Forum 2022
    • Asia REIT Forum 2022
    • APAC Data Centre Forum 2022
    • Singapore Focus Forum 2022
    • Office Strategies Forum 2022
    • More Events
  • MTD TV
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail
  • Research & Policy
  • Advertise

China Led APAC Real Estate Markets with $31.2B in 2018 Deals

2019/02/21 by Jesus Alcocer Leave a Comment

Petra Blazkova, RCA’s Senior Director of Analytics for Asia Pacific, says international investors were unperturbed by China’s slowdown.

China led all Asia Pacific markets in sales of income generating properties in 2018, taking the top spot for the second year in a row, according to a report by market data provider Real Capital Analytics (RCA).

Mainland China’s sales of income-generating properties tallied $31.2 billion in 2018, down 14 percent from the $36.2 billion in 2017, but still 8.3 percent ahead of Japan and Australia which tied at $28.8 billion.

China Comes Out on Top Despite Slowdown

The decline in Asia’s largest income property market is accelerating, with 2018’s decrease in volume compared to 2017 outstripping the previous year’s decline by 57 percent quicker, due in part to a  a tighter lending environment.

Altus - AE Free Trial In-story Banner

China recorded its lowest GDP growth rate since 1990 in 2018, as well as the lowest IP investment volume since 2014. Despite the relatively sour picture, China-based investors were the continent’s largest buyers of income generating property in terms of value, with China Vanke, Hopu Investment, Bank of China, Hillhouse Capital and SMG Eastern, all among the consortium which privatised Global Logistics Properties, forming the top five buyers.

Hong Kong-based companies or individuals including David Chan Ping-chi, Ma Ah Mok and Lo Man-tuen, all of whom were among the buyers of The Center on Queen’s Road, accounted for the next sixth-through tenth biggest buyers of APAC properties, thanks in large part to the $5.2 purchase of the office building, which closed in early 2018. Last year stands in stark contrast to 2017, when only two of the top five buyers in the region were Chinese.

Moreover, RCA’s numbers suggest that investors are still bullish on the the Mainland, with many investors shifting their capital into development projects. Purchases of unfinished Mainland China projects reached $624.4 billion this year according to RCA, up five percent year on year — more than 26 times the size of its closest competitor Hong Kong. This year’s rise in China’s pipeline, however, is dwarfed by that of 2017, when the value of deals for sites under development rose 42 percent to $596 billion.

“International real estate investors from outside Asia Pacific markets, particularly US, Canadian and UK players, appeared unperturbed by the China-led slowdown in the second half and drove 2018 cross-border capital flows into the region 17 percent higher last year at $27.0 billion, to the strongest level since 2008,” said Petra Blazkova, RCA’s Senior Director of Analytics for Asia Pacific.

Australia Pushes Past Japan Among Top Five Markets

Seoul gangnam korea

Seoul’s income property market rose 58 percent to $17 billion

While China remained king there were large changes elsewhere in the rankings.

Ranking next in line for trades of incoming generating properties in the region were Australia in the second spot, followed by Japan, Hong Kong, and with South Korea taking the fifth position. In the previous year, Japan had ranked second, followed by Japan, Australia, Hong Kong and Singapore.

Changes in deal volumes were driven by a fall in Japanese project launches (the largest in APAC) and the rapid rise of South Korea — which at $22.7 billion was just $310 million shy of the volume of fourth place Hong Kong in 2018.

This was Tokyo’s slowest year since the 2008 financial crisis, as the country’s listed real estate investment trusts (REITs) slowed-down their purchases amid near-record prices, a factor that also dampened appetite among foreign investors, who completed only four transactions in the city in the last quarter of the year — the lowest deal count since 2009. The city has struggled with high-priced assets at least since 2017, when investors began fleeing Tokyo for regional cities like Yokohama and Osaka in search of higher yields.

Office forum 2022_250 ad

Australia remained stable this year, allowing it to slide slightly ahead of plunging Japan. The Australian, investment property market is finally starting to look bright after two years of declining deal volumes, hampered by a lack of investable stock. Yields in Sydney and Melbourne were below their respective 10-year averages in office, retail, and logistics, according to a report by Australia-based M&G Management.

The market of income generating properties in Korea grew 43 percent during 2018, which allowed it to grab the fifth position in the ranking from Singapore, where transactions for mature investment properties dropped 15 percent to $7.6 billion last year. The growth in Korea’s market was driven by Seoul, which rose 58 percent to 17 billion, just 347 short of the quantity in Tokyo, which ranked as the second largest city market behind Hong Kong.

Weak Fourth Quarter Leads into Anxious New Year

In general, Asian markets performed better in the first three quarters than in the last, as investors concerns about market volatility and slower global economic growth flared, according to RCA.

Mingtiandi Membership 320x320 v2

“While property investment started the year strongly, activity decelerated in the second half, with investors concerned about financial market volatility and the weaker economic outlook. But investors were also looking beyond current economic jitters at longer-term structural change in the markets and the industrial market benefitted,” said Blazkova.

Year on year declines in the fourth quarter were most radical in Japan (62 percent), Hong Kong (56 percent) and China (25 percent), where credit tightening measures, announced since 2017, began to be enforced in earnest in the second half of last year.

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Research & Policy Tagged With: cm-ml, daily-sp, M&G Management, Real Capital Analytics

https://player.vimeo.com/video/658501079?h=a77da22425

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Mingtiandi Delivered

2022 Event Calendar House Ad1

MTD TV

PGIM, Yardi on How Tech Powers Asian Real Estate Innovation: MTD TV
Investors Boost APAC Logistics Deals Amid E-Commerce Boom

More MTD TV Videos>>

People in the News

Lu Yi Shimao
Asia Real Estate People in the News 2022-06-27
Wu Jianxin Kaisa
Asia Real Estate People in the News 2022-06-20
Graham Mackie Tishman
Tishman Speyer Appoints Graham Mackie to Lead APAC Push Beyond China and India
Antoine Mesnage
AXA IM Alts Appoints Antoine Mesnage as Head of Australia, Promotes 2 Other Execs

More Industry Professionals>>

People in the News

Asia Real Estate People in the News 2022-06-27

Lu Yi Shimao

A senior appointment by one of China’s crew of defaulting privately-controlled developers leads this week’s roundup of … Read More>>

Asia Real Estate People in the News 2022-06-20

Wu Jianxin Kaisa

Top level executive changes at a pair of major mainland real estate companies lead this week’s round-up of personnel … Read More>>

Tishman Speyer Appoints Graham Mackie to Lead APAC Push Beyond China and India

Graham Mackie Tishman

US developer Tishman Speyer has hired industry veteran Graham Mackie as a managing director to lead the firm’s Asia … Read More>>

AXA IM Alts Appoints Antoine Mesnage as Head of Australia, Promotes 2 Other Execs

Antoine Mesnage

AXA IM Alts is shaking up its leadership team Down Under with the appointment of Antoine Mesnage as the French firm’s … Read More>>

More Industry Professionals>>

Latest Stories

Albert Yeung Emperor International
Deep Water Bay Home Sells for $111M in Hong Kong’s Priciest Deal This Year
Agile Group chairman Chen Zhuolin (Source: Getty Images)
China’s Agile Gets Mezzanine Loan From Hong Kong Tycoons at 20%
Robert Wallace FLCT
Frasers’ FLCT Buying UK Logistics Development From Stoford for $124M

Sponsored Features

Should Proptech Give Us Sleepless Nights?
Hong Kong’s Evolving Commercial Real Estate Landscape
Opportunities in the Greater Bay Area

More Sponsored Features>>

MTD-QR-Code-320

Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • 2022 Event Calendar
  • MTD TV Archives
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Mingtiandi Membership
  • Newsletter Subscription
  • Advertise
  • Terms of Use
  • Privacy
  • Join the Mingtiandi Team


© 2007-2022 China Advertising Media Ltd (Samoa). All rights reserved.