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Slow stock markets help fuel Asian real estate boom

While stock markets the world over continue their bearish ways, real estate is becoming an increasingly attractive form of investment. In Asia, the market has seen major growth recently, and industry experts anticipate the expansion to continue into the future, according to Property Wire.

Currently, the biggest markets in the Asia-Pacific region are in China and Australia, but Japan is making a comeback following its tsunami disaster earlier this year. Megan Walters, head of research for Capital Markets at Jones Lang LaSalle claimed the property market in the region is expected to see as much as US$100 billion in transactions this year alone. The heavy investment is backed by good economic sense, as well: prime office stock in cities such as Shanghai or Sydney offers yields of over 6 per cent, claims Walters.

In China, approximately US$5 billion worth of commercial transactions took place in Q1, including the purchase of a state of the art office building for US$94 million in the Pudong area of Shanghai. Other cities in China saw similar action, such as the purchase of a 560,000 square foot factory in Suzhou in the largest deal between the Singaporean and Chinese governments to date.

While China booms, Australia remains the most attractive option for international investors. Boasting an S&P AAA credit score, Australia received only slightly less than US$4 billion in direct investment, nearly half of which came from overseas.

With the overall economic climate not likely to greatly improve in the near future, real estate will continue to be an overall safe and profitable investment. China in particular, and the entire Asia-Pacific region, are set to capitalise, and as more and more big deals get completed, look for the market to continue to grow.

Source: Asian Property

ThaiVest Editorial Team
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