There is no denying that 2016 was an eventful year, with Brexit and the surprising US presidential election result grabbing headlines around the globe. By comparison, the economic and political landscape in Asia-Pacific was rather more sedate. But as we look ahead to 2017, how will these ongoing global dynamics shape the economies of this region and, more specifically, the real estate sector?

Despite uncertainty, 2016 delivered high levels of activity, with new investors allocating capital to property in Asia-Pacific. With most economies in the region on a robust growth trajectory, real estate markets were resilient. Investors took the shock of last June’s Brexit vote in their stride and transaction volumes in this part of the world were similar to 2015. Based on our data, intra-regional capital flows trended slightly higher, but capital flows between the regions fell y-o-y, in part because investors preferred markets closer to home in times of uncertainty.

In 2016, several landmark deals were made: Qatar Investment Authority bought Singapore’s Asia Square Tower 1 for US$2.45 billion ($3.55 billion) in the largest single-tower deal in Asia-Pacific so far, signalling revitalised investor confidence in the city state’s office market. Elsewhere, other high-profile deals included Brookfield Asset Management’s acquisition of the International Finance Centre Seoul for US$2.7 billion and the sale of Century Link complex in Shanghai to insurance company China Life for U$2.96 billion.

 

Qatar Investment Authority bought Asia Square Tower 1 for US$2.45 billion in the largest single-tower deal in Asia-Pacific so far, signalling revitalised investor confidence in the city state’s office market

asia square

 

A review of the key markets

China continued to be a big story in 2016, overtaking the US to become the largest cross-border real estate investor and chalking up close to US$18 billion of investment in international commercial property assets in the first three quarters of the year.