China propels major real estate deals to record level

Major real estate investment deals hit a record US$86 billion in Asia-Pacific region in the first half of 2019 despite a softening global market, mainly led by strong momentum in China, world's leading property consultancy JLL said in its latest report.

That marked a year-on-year increase of 6 percent, in contrast to the 9 percent drop in transaction activity registered around the globe, which stood at US$341 billion for the first six months, according to the Global Capital Flows released on Thursday by JLL.

"Due to the tightening of yields in core markets across the globe, particularly in Europe and US, investors are made to look beyond their domestic markets in search of higher returns," said Stuart Crow, CEO of Capital Markets Asia Pacific, JLL. "Joint venture and consortium structures continue to increase in popularity for large deals across the region as investors seek to go more direct and see the benefit in partnering with long-term like-minded groups."

In China, which ranked the world's second most liquid real estate market during the first half, a record-setting start to the year propelled first-half volumes to a new high of 170.7 billion yuan (US$24.1 billion), a year-on-year surge of 137 percent.

China's real estate investment market has become notably more active since the last quarter of 2018 when foreign investors continued to increase their investments in the country. The cumulative transaction amount in China reached 214.4 billion yuan during the six-month period through March 2019, exceeding the average annual transaction volume in the past three years, JLL data showed.

Among the most significant cross-border transactions of the second quarter in China was Brookfield's acquisition of a mixed-use commercial complex in Shanghai. The US$1.5 billion transaction is the biggest by the firm in China and one of the largest by a foreign investor in China to date.