Real estate investment activity in the South East Asian countries of Malaysia, Singapore and Thailand rose by about 4.5% quarter-on-quarter (q-o-q) to USD4.9bn in Q2. The lion’s share of activity continued to be in Singapore, while transaction volume in Malaysia doubled q-o-q but declined in Thailand.
The increase in hotel, retail and residential investments in Q2 outweighed the fall in activity in the other real estate segments. Hotel investments, largely in Singapore, rose by more than five times to USD754.3m in the quarter. Retail deals doubled q-o-q while residential investments increased by 23.0% q-o-q to USD 2.1bn, accounting for the majority, or 42.0% of activity in Q2.
The foreign share of investment activity in South East Asia rose to 23.5% in Q2, with USD1.2bn of transactions, the first time since Q2 2010 that the foreign share had exceeded 20%. Asian investors provided the main source of capital, accounting for close to 85%, or USD970.9m of foreign investments.
Property companies were most active in Q2, but their investments continued to fall by a further 19.4% to USD2.6bn in the quarter. In contrast, activity by both listed and private property vehicles increased in Q2. Notwithstanding, private property vehicles continued to be net sellers of properties.
Looking ahead, real estate investment activity in South East Asia is likely to be tempered despite an expected boost from activity by listed property vehicles (including REITs). This is due to a lack of readily available assets for sale as well as investor caution because of the uncertainty surrounding the timing of the pullback of the US Federal Reserve’s quantitative easing measures. Therefore, we now expect real estate investments in South East Asia this year to be lower than last year’s volume of USD26.9bn.
Source : DTZ (Groupe UGL)