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Big growth in Asian real-estate investments

Asia’s real-estate investment market saw encouraging growth in the total value of sales transactions in the second half of 2010, thanks primarily to abundant liquidity and the continued inflow of capital, according to global real-estate services firm Colliers International.

In anticipation of further economic growth in the region, business confidence has strengthened further, as shown by positive hiring expectations. Real-estate occupiers engaged in intra-regional trade and the buoyant financial-services sector were the key end-users underpinning leasing demand during the period, the firm said.

With the expectation of growing inflationary pressures, more end-users also adopted a forward-looking strategy in their real-estate plans, including the consolidation and upgrading of their business addresses. As a result, real-estate rentals picked up additional momentum in the second half of last year. In particular, centres with higher exposure to financial industries grew at a faster-than-expected pace.

Colliers said that buying interest for quality real estate remained keen in the second half of 2010, under-pinned by the continued catch up of rentals and the sustained low cost of capital. According to its research, the total volume of real-estate investment sales transactions increased more than 44 per cent during the second half of last year.

Looking at a breakdown by subregion, Greater China continued to constitute the majority of the total volume, but Southeast Asia and Australasia were the two out-standing spots in terms of percentage growth.

In Southeast Asia, office sales transactions posted a quantum leap of more than 300 per cent due to hectic activity in Singapore, which was highlighted by the sale of DBS Towers One and Two by Goldman Sachs to Overseas Union Enterprise, a firm controlled by the Lippo Group, for 870.5 million Singapore dollars (Bt20.92 billion).

Another market focus was the portfolio renewal and expansion by real estate investment trusts. In October, KREIT Asia acquired a one-third interest in Singapore’s Marine Bay Financial Centre for S$1,426.8 million. One month later, Suntec REIT also took a one-third interest in MBFC for S$1,496.8 million.

In Australasia, office sector-specific real-estate funds were key contributors to overall growth. For example, four office buildings in the Melbourne CBD were sold to the Commonwealth Property Officde Fund by Grocon for an aggregated 575.8 million Australian dollars (Bt17.82 billion). In Brisbane, Charter Hall Group’s Core Plus Office Fund purchased a 50-per-cent interest in Brisbane Square in a 50:50 joint venture with Telstra Super for A$300 million. (The Nation Website)


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