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The View | Are mainland China and Hong Kong really the weakest links in Asian real estate?
Despite lagging investment, mainland Chinese and Hong Kong real estate markets still have unappreciated long-term growth opportunities
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Things are looking up for commercial property investment markets in Asia. Following a sharp slowdown caused by an aggressive global monetary tightening campaign, transaction volumes have recovered significantly this year, rising 28 per cent in annualised terms in the first three quarters of 2024 among countries analysed by property services firm JLL.
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Last quarter, JLL data shows that volumes reached US$38.8 billion, the highest level since interest rates began to rise steeply in early 2022.
Cross-border capital inflows, an important gauge of investment activity, have picked up, with both Asian investors – the dominant source of cross-border investment in the region – and global funds deploying more capital in a range of markets and sectors, including office and retail properties.
In fact, across most major markets, bullish narratives and more promising investment themes are evident. Some markets have gone from strength to strength, while others never skipped a beat.
In India, where overseas investors account for the bulk of investment activity, private equity investment in the property industry reached US$2.9 billion in the first half of this year, compared with more than US$3 billion for all of 2023. In a sign of the increasing maturity of India’s real estate industry, domestic investors accounted for more than 20 per cent of private equity deals in the past year, according to Knight Frank.
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In South Korea, Seoul’s office market has defied the pandemic-induced deterioration in sentiment towards offices, attracting US$7.8 billion of investment in the first three quarters of this year, the highest amount among the world’s leading office markets, according to MSCI.
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