Commercial real estate transaction volumes were down in Asia Pacific during the first quarter of 2016. Research from Jones Lang Lasalle showed that volume fell by five percent y-o-y to USD23.7 billion. There were gains in Hong Kong, Australia and South Korea but weakness in Japan dragged the overall numbers downward.
Investor interest in Thailand during the first quarter was strong but JLL reported that no direct commercial property investments took place. One reason for this was a lack of assets being available in Bangkok’s prime locations.
“Both domestic and foreign investors have continued to show strong interest in acquiring good-quality commercial properties in Thailand, particularly office buildings in Bangkok,” Suphin Mechuchep, managing director of JLL Thailand said in a press release. “However, the country saw no direct real estate investment activity in the first quarter of this year due to the lack of assets put up for sale.”
JLL noted that the first quarter’s most significant investment transaction in Thailand was the acquisition of a six-rai plot of land on Silom Road. The site was purchased by NYE Estate and Minor International Group on a 50-year lease term. Since it was a land transaction and not a real estate one, it was not included in JLL’s Global Capital Flows.
“NYE Estate and Minor International Group acquired only the land while the existing three office buildings on the site will be removed to make room for a new commercial development project,” Suphin pointed out.
Asian investors preferred markets closer to home during the first quarter as global economic uncertainty continues to make buyers unsure of where to put their money. Capital flows between countries within the region jump significantly highlighting this trend. JLL research revealed that intra-regional buyer transaction volume rose to USD4 billion in the first three months of 2016 while international purchaser capital flow dropped by 74 percent during the same period.
