By Romesh Navaratnarajah: Total global real estate investment volumes soared 24 percent to S$108 billion in Q2 2012, according to Jones Lang LaSalle (JLL) Capital Markets Research.
Data collected from over 60 countries in Q2 shows an upturn from the small dip in activity for Q1 2012, when volumes slid to S$87 billion.
"Investment volumes continue to be resilient. Demand for the best income generating real estate is strong across the world as sovereign wealth, pension funds and private wealth continues to diversify across investment classes," noted Arthur de Haast, Head of the International Capital Group at JLL.
The Asia Pacific, Middle East & Africa, Europe and Americas all saw growth in Q2, with America posting a significant 33 percent uptick, while Asia Pacific rose 19 percent quarter-on-quarter to US$26 billion (S$32.44 billion).
In addition, the region is the only market to record year-on-year growth at S$26 billion from S$20 billion over the same period last year, buoyed by increased trading activity in Australia, Hong Kong, China and Singapore.
Moving forward, David Green-Morgan, Global Capital Markets Research Director at JLL predicts "increased activity in the second half of the year as investors continue to move towards real assets as yields from other asset classes remain low".
"We have seen increased activity from Canadian, US and Middle Eastern money. We can also expect increased activity from capital from Asian countries such as China, Indonesia and Thailand."
Commenting on Singapore's standing, Stuart Crow, Head of Asia Pacific Capital Markets at JLL, said: "Singapore remains one of the most actively traded markets in Asia Pacific, with investors attracted to the long term fundamentals and low interest rate environment."
While most of the activity was from local investors, Crow pointed out significant interest from other Asian high-net-worth and institutional investors.
"With yields continuing to compress in the prime office sector many investors have been focussed on retail, industrial and redevelopment opportunities in recent times. We expect the remainder of 2012 to be very active, with several large transactions likely to be concluded."
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