Jun 23, 2011
Real estate investment in Asia picked up significantly in the second half of 2010.
Territories such as Japan, Hong Kong, Singapore and China the most active markets. This real estate trend continues well into 2011 and the Chinese government has already begun to implement policies to keep their home-grown real estate market from overheating. These policies are often accompanied by the dreaded “B” word- Bubble market.
A Bloomberg Medica report last winter noted this real estate bubble fear:
Chinese Premier Wen Jiabao also said Jan. 18 the government will “resolutely” implement controls on the real estate market in the first quarter. China’s property prices will fluctuate within a 10 percent range this year, Shen said, adding that the country “may only avoid the bubble burst if current property tightening is effective.”
These four markets alone accounted for more than US$29 billion of transactions in the period between July and December 2010, a massive 83 per cent of the total regional volume.
The Asian real estate investment market ended 2010 on a strong note, with total transaction volume reaching US$62 billion, a surge of 59 per cent year-on-year, according to CB Richard Ellis’ Asia Investment MarketView report for the second half of 2010.
China was one of the first markets to recover in the present cycle and continues to be dominated by domestic corporations, while foreign institutional investors mostly disposed of investment properties in the country at a gain. Institutional investors have been shifting to other investment markets, with Singapore witnessing a record quarterly investment volume of more than US$5 billion in the fourth quarter of 2010, a total of 31 per cent of the total regional volume for the period.
Elsewhere in South East Asia, the Malaysian investment market received a boost from Starhill REIT’s acquisition of eight hospitality properties for a total of US$330 million.