Real estate investment plunges 42% in Asia Pacific

MAJOR capital markets in Asia Pacific saw subdued sentiment in real estate investment in the first quarter of this year with the Chinese mainland recording a dive of 70 percent in volume, an industry report has found.

Investment volume across the region fell 42 percent quarter on quarter to US$11.6 billion during the three-month period ended on March 31, partly due to new year holidays in January and the high investment volume witnessed in the second half of 2011 which removed several assets from the market, CB Richard Ellis, the world's largest commercial real estate services provider, said in its Asia Pacific Capital Markets Marketview report released today.

The only market that bucked the downward trend was Hong Kong, where investment volume doubled from the previous quarter amid improved lending sentiment.

Investment in China's mainland, meanwhile, plunged to US$949 million between January and March, according to CBRE.

"China's property investment market was relatively quiet in the first quarter, in part due to the Chinese new year holidays, with the exception of continued strong activities of occupier purchases by domestic companies and development acquisitions between developers," said Greg Penn, executive director of CBRE Investment Properties, Asia. "Many developers in China continue to face liquidity challenges and this may offer opportunities for investors to provide capital and acquire asset portfolios."

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