Wednesday, August 22, 2012

Property market keeps afloat: JLL report

The Asia Pacific property market remains resilient due to strong investment volumes, even on the back of uncertainties in the global economy, according to Jones Lang LaSalle’s (JLL) Asia Pacific Property Digest (APPD) for Q2 2012.

Despite this, the slowdown in leasing activity hints that the region “is not completely immune.”

Strong direct commercial property investment market in Q2 was highlighted by a 26 percent year-on-year increase in volumes to US$26 billion (S$32.55 billion). As stronger investment volumes came in, capital values also increased across most major markets.

On the contrary, office leasing activity dipped by about 10 percent in Q2 this year compared to 2011, mainly due to “corporate caution and the flow-on effects of ongoing economic uncertainty.”

Dr Jane Murray, Head of Research Asia Pacific at JLL, noted, “The Asia Pacific property markets are holding up relatively well given the global economic backdrop. Leasing activity levels should continue to trend moderately lower than last year’s record levels, while we expect investors will continue to search out opportunities, particularly in prime locations.”

That said, JLL expects capital values and rents “to grow in most markets, albeit at a slower rate than 2011.”

Jeremy Sheldon, Managing Director for Markets Asia Pacific at JLL, said, “There has been a decline in the established financial markets, however we are seeing strong demand in key South East Asian markets, and certain cities in China. While this pattern is likely to continue through to the remainder of the year, we are optimistic that leasing will remain largely stable.”

As for Singapore, Chua Yang Liang, Head of Research South East Asia at JLL, said the country “remains at the cusp of this shift and given cost savings as the modus operandi for most firms together with tighter immigration, the Singapore residential leasing market is likely to face further downside pressure.”

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