Real Estate

Among Asian cities, Shanghai, the commercial and financial centre of China, is on track to become part of the “Big Seven” group of Established World Cities before the end of the decade.

That’s according to JLL’s Director for Global Research, Jeremy Kelly, who says that Shanghai’s fast-track momentum is supported by massive infrastructure investment, increasing global connectivity, improving transparency and a shift into high-value activities.

Shanghai’s rise up the real estate investment ranking has also been spectacular.

“Real estate transaction volumes have increased more than ten-fold over the past decade, testimony to a city that is fast-tracking to maturity,” says Kelly, explaining that direct commercial real estate investment volumes in the city grew from US$1.4 billion in 2006 to US$15 billion by 2016. The city’s current real estate investment intensity is due to the very high volumes of domestic capital chasing assets, he explains.

Betwee…

Private equity real estate debt funds in Asia Pacific are aiming to achieve a record volume of capital raised in 2017, with more funds actively in the market than any other year on record.

Funds whose primary strategy is debt investment are aiming to raise over US$2.5 billion in 2017, across 14 separate managers – more than double the target for 2016 vintage funds. In addition to this, there are a further 11 funds in the market targeting nearly US$10 billion that have debt strategies listed as a potential investment alongside other equity-based strategies.

Figure 1: PERE debt capital raising 2010-2017

Source: Preqin, JLL

Much of the focus from these primary debt funds is on India and Australia, with funds targeting those markets accounting for 86 per cent of capital raised or targeted between 2015-2017 (YTD). Most fund managers are domestically-based and are raising capital in local currency, however some of the larger India funds raise in USD. Read more

Thailand’s Ticon Industrial Connection Plc (TICON) plans to convert three of its property funds into the country’s largest real estate investment trust (REIT) with total combined asset of 32 billion baht ($964 million).

The three property funds are Ticon Property Fund, Ticon Park Logistics Fund and Ticon Industrial Growth Fund. The merger comes amidst  the Securities and Exchange Commission regulation that disallows property funds from raising further capital in a move seen to promote REITS.

TICON unveiled plans to convert three property funds – TFUND, TLOGIS, TGROWTH into TREIT by fixing a swap ratio at rate of 1 investment units of funds to 0.9874 / 1.0129 / 0.8673 trust units of TREIT, accompanied by a cash of 1.6977 / 1.7415 / 1.4911 baht per unit respectively. Therefore, the funds/trust unitholders’ meeting will be held during 18-19 October.

The group is confident that the move will surely bolster unitholders’ benefi…

Japan’s logistics real estate market may see some price softening next year as new supply outpaces demand, opening up potential opportunities for new investors to enter the market.

As J-REITS and non-listed core capital from institutions such as Deutsche Bank and Morgan Stanley see opportunities in Japanese logistics amid ultra-low interest rates, the market could potentially soften in 2018, according to Pelham Higgins, from JLL’s Industrial Capital Markets team in Tokyo.

The logistics focused J-REIT Japanese Logistics Fund (JLF) recently acquired two assets—the Yokohama Machida Logistics Centre and the Takatsuki Logistics Centre—amounting to US$246 million (JPY 27 billion). These new acquisitions took the total value of JLF’s portfolio to US$2.44 billion (JPY 268 billion).

“The Yokohama Machida Logistics Centre deal was concluded at a sub-4 percent NOI (net operating income) capitalisation rate (cap rate), and it’s not the only one that has recently t…

Leading today’s news, one of Singapore’s richest men is going big on data, or at least on the buildings that house it, while Australia picks up 4.6 billion baht by selling its Bangkok embassy site to a local developer.

Also in the headlines, Evergrande’s chairman turned his company’s debt-fueled expansion into a spot as China’s richest man – for a few hours. Read on for all these stories and more.

SG Tycoon Investing $5B to Build Data Centre Empire

Tycoon Oei Hong Leong is investing US$5 billion (S$6.73 billion) to set up a new company, named One Belt One Net, that will build data centres.

As the name implies, Mr Oei envisions the business as a way to complement China’s One Belt One Road initiative, a massive project to ignite growth in the countries along the ancient Silk Road. Read more>>

HNA Says It Has “Sufficient Capital for HK$27B in Kai Tak Projects

HNA Group, the Chinese conglomerate that spent HK$27.2 billion (US$3.5 billion) for …

Co-living is a form of housing where residents share living space and a set of interests and values.

It is part of a modern, urban lifestyle that values openness and sharing, and aligns with the general shift toward ridesharing/carsharing and coworking. In particular, co-living can be seen as an extension of the co-working trend that see people share office space and common facilities in order to save costs and share ideas.

Co-living houses may offer short-term accommodation and host regular events for residents, many of which are students, startup founders or employees, young professionals, as well as artists and creatives.

In a sense, it is student accommodation for grown-ups.

China is a trail blazer in this space in Asia. YOU+ International Youth Community already offers rooms of between 22 to 50 sqm to young people in Guangzhou and Beijing (see Table 1). The trend is also catching on in other markets.

Campus Hong Kong operates a co-li…

The technology sector is one of the most important occupier categories in Asia Pacific. For example, the region is now home to seven of the 22 global fintech unicorns—startups valued at more than US$1 billion.

The e-commerce industry has been a major contributor to office leasing demand and is projected to grow substantially in the near term.

Over the last few years, we’ve seen tech firms moving into Grade A office space in prime locations. The first of our tech series reports, “Tech firm office location choice—how does it work in Asia Pacific?”, examined the Silicon Valley-like pockets that have popped up across Asia in cities such as Shenzhen and Bengaluru.

Just as financial services companies cluster near stock exchanges, tech companies are also forming clusters.

The tech sector and their office needs

What do tech companies consider when deciding to locate their office? Let’s take a look:

A reliable power supply: When you’re storing larg…

Asian cross-border investment surged by 98% y-o-y to US$ 45.2 bn in H1 2017. The increase was partly due to a one-off US$ 13.2bn purchase of a logistics portfolio in EMEA. Chinese investors remained most active but the composition of buyers changed amid increased scrutiny of cross-border capital flows.

Other major sources of capital including Singapore, Hong Kong, Korea and Japan all saw higher levels of outbound investment. One continuing trend is that of fewer but larger deals.

The Americas and EMEA remained the preferred regions for Asian cross-border investment but turnover within Asia also increased. London, New York and Hong Kong are still the top three destinations.

Chinese outbound investment is still at a nascent stage and is set to continue as a long term trend.

In the short term, the buyer mix is likely to change and the pace of investment may moderate as investors refine their investment strategies and adjust to new rules.

Read…

Investors are allocating more capital to real estate worldwide, with Asian investors now accounting for five of the 10 biggest cross-border spenders.

Inter-regional investment reached US$19.5 billion in Q2 2017, up 71 per cent from the same period last year.

Globally, China was the third biggest source of cross-border capital into real estate in the first half of the year at US$6.2 billion, behind Germany and the UK. After China, Asia’s biggest spenders were Hong Kong (US$4.9 billion), Singapore (US$4.1 billion), South Korea (US$1.9 billion) and Japan (US$1.6 billion).

Almost all of their capital targeted the world’s three largest and most liquid real estate markets, with the US receiving US$10 billion, the UK pocketing US$6 billion, and Germany US$2 billion.

China star performer in the region

In what could be the biggest single asset deal of the year, Chinese conglomerate HNA acquired 245 Park Avenue, a Midtown office tower, for US$2.21 billion…