The office sector was drawing in US$30.6 billion liquid asset investment

Market research conducted by JLL estimates that around US$70.9 billion ($97.8 billion) in regional Asia Pacific transaction volumes were completed during the beginning of the year. This is an increase of 17% year-over-year decrease when compared to the same timeframe in 2021.

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JLL states that the decrease in investment volume is due to the slowing of deals in some of the major markets in the region. Investors reacted to the tightening of the rate cycle and the possibility of inflation The consultancy says.

“Investors have adjusted their capital deployment strategies to match a more aggressive rate tightening cycle” declares Stuart Crow, CEO, capital markets, Asia Pacific, JLL. “Clear opportunities are there and we’re encouraging clients to anticipate a new price discovery phase to be the dominant topic for the rest of 2022 due to the macroeconomic challenges and persistent inflationary pressures impact the decisions.”

Offices were the asset category with the highest liquidity accounting for US$30.6 billion for 1H2022, however it was still an 8% year-over-year decrease. The investment in logistics and industrial assets in the amount of US$14.6 billion was reported this year, which is 37% reduction compared to the previous year. The capital deployments in retail assets were recorded at $14 billion, or 31% decrease y-o-y.

Lockdowns related to the pandemic in China caused the 39% reduction in investment volume in the region of US$14.1 billion. In addition, the absence of transportation transactions Japan resulted in an investment volume that fell in the region of US$11.5 billion, a drop of 33% in a year.

South Korea saw the largest amount of capital investment in 1H2022 at $15.3 billion, boosted by large office deals. Singapore also saw an increase in the amount of investment, increasing to 81% year-on-year to US$9.3 billion as a result of major mixed-use and office development.

According to JLL sustainability frameworks are top of the list for numerous investment committees. JLL anticipates that investors will put more money into value-added strategies, such as transforming old buildings into green structures because occupiers are more likely to choose better-quality spaces post-pandemic.

In the future in the near future, investors will be prudent in the long-term when pricing financial markets tightening for any future investments according to JLL.