Asian property market sees 83% in Q1 sales

Asian property market sees 83% in Q1 sales
The Hindu Business Line, May 15, 2009, Page 17

Weak investor appetite for risk cited as reason.

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‘The investment market in India will see a revival when the global sentiment stabilizes and international and domestic financial institutions and equity funds get the confidence to participate.’
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Our Bureau, Mumbai

The Asian property investment market has recorded an 83 per cent fall in sales (quarter-on-quarter) in the first quarter of 2009, from $18.02 billion to $3.1 billion, according to a survey by global real estate services provider CB Richard Ellis.

Data for the first quarter of 2009 indicated that Japan, Singapore and Hong Kong suffered the biggest fall in sales volume.

The industrial property sector underwent the largest drop, plummeting 95 per cent from the same quarter a year earlier.

Office property transactions slid 89 per cent and retail property transactions 40 per cent.

Prime office properties continued to attract investors, accounting for seven of the 10 largest deals recorded during the quarter.

The combined value of the 10 transactions was $1.7 billion, a drop of 81 per cent from the same period in 2008.

The survey attributes the fall in sales to weak investor appetite for risk and the gap between buyer/seller expectations.

The market review, however, said there was noticeable improvement in sentiment in a number of key markets in March as the rate of economic decline appeared to be easing.

India market


Mr Anshuman Magazine, Chairman and Managing Director, CB Richard Ellis, South Asia, said, “The Indian real estate market more or less mirrored the Asian markets with declining transaction volumes and scarcity of capital.

The investment market in India would see a revival when the global sentiment stabilises and international and domestic financial institutions and equity funds get the confidence to participate in the market.”

Activity in the Indian real estate investment market continued to be slow under the impact of the global economic downturn. There was a further drop in end-user activity which in turn caused a correction in prices across various segments.

Transaction Volume

In Greater China, investment sentiment rallied on the back of increased confidence in the recovery of the domestic economy.

Transaction volume nevertheless remained low owing to the ongoing market slowdown and falling capital values.

Institutional investment activity in Hong Kong evaporated as investors continued to find it difficult to raise debt and equity.