Tempered growth in Asia-Pacific

Continued investment points to long-term resilience in Asia-Pacific markets, despite rental growth failing to meet predictions.

Investment in commercial real estate increased to US$26 billion in the second quarter of 2012, a 26% increase on the same period in 2011.

Japan saw the highest levels of growth at 290% as its economy rebounded from the Tohoku earthquake of March 2011, whilst Hong Kong, Singapore and China also registered growth in double figures.

Substantial volumes of investment have also led to growth in capital values across most major Asia-Pacific markets, with Beijing and Jakarta seeing an increase of 11% and 9% respectively on the first quarter of 2012. Shanghai, Tokyo and Sydney all showed minor signs of growth up to 1.5%.

However, recent figures in the Asia Pacific Property Digest market report from Jones Lang LaSalle show a decrease in leasing from last year’s peak, suggesting the region is not immune to worldwide financial conditions.

Jane Murray, head of research for Jones Lang LaSalle, said: “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. In turn, we anticipate rents and capital values will continue to grow in most markets, albeit at a slower rate than 2011”.

These figures suggest that – despite fears of a global shift towards the major Asian urban centres – the Asia-Pacific market is not exempt from financial fluctuations elsewhere. In spite of tempered growth, the Asia-Pacific market still appears to be an attractive investment for many international corporations seeking long term investments. Serviced business centres from Search Office Space offer the flexibility to react quickly to changing economic climates in emerging markets with the minimum of effort.