Commercial real-estate investment in the Asia-Pacific region appears set for a record this year, finally topping pre-financial crisis levels and shrugging off recent stock and currency market volatility.
For the first three quarters of the year, the region's commercial real-estate transactions totaled $89.6 billion, up 25 percent from a year earlier, Jones Lang LaSalle said, adding transactions exceeded its expectations.
The real-estate services company raised its year-end forecast to $120 billion, from $110 billion, adding this would put 2013 on par with 2007, the strongest year ever by transaction volume.
The segment is seeing "unrelenting demand," said Stuart Crow, head of Asia-Pacific capital markets. "We are seeing increased activity from Asian pension and sovereign funds, together with new sources of global capital that are allocating to Asian real estate for the first time."
Australia, Japan and China led regional demand, accounting for 69 percent of the region's completed transactions so far this year, the company said.
Japan's third-quarter deals climbed 139 percent from the year-earlier period, while year-to-date transactions are up 69 percent at $29.5 billion, amid interest from both domestic and offshore investors.
China's activity rose 167 percent in the third quarter, while year-to-date, it is up 34 percent at $16.6 billion; offshore investors accounted for over half of the transactions in the third quarter.
Australia's activity rose 25 percent year-to-date to $4.9 billion, after third-quarter investments rose 17 percent from a year-earlier, although they fell from the second quarter.
"Given the robust pipeline and continued strength of investor sentiment, we remain positive on the outlook for the remainder of the year," said Dr. Megan Walters, head of research for Asia Pacific capital markets at Jones Lang LaSalle.
But she added, increases in the yields of longer-dated bonds across the region amid expectations the Federal Reserve may taper its asset purchases are a concern.
- By CNBC's Leslie Shaffer. Follow her on Twitter: @LeslieShaffer1
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