Investment momentum remained strong, with transaction volume rising 28 percent quarter-over-quarter to $33 billion, supported by the completion of several big-ticket deals in Australia and Hong Kong, according to CBRE’s Asia Pacific second quarter report. Property companies were the major buyers, accounting for more than 30 percent of total acquisitions, including three of the five largest deals.
Office demand helped drive a 22 percent quarter-over-quarter increase in net absorption to 16.8 million square feet during the second quarter 2018. Active markets included tier I cities in China, Hong Kong, India, Tokyo and Singapore. Vacancy fell to 11 percent during the first quarter 2018 from 11.3 percent in the previous quarters thanks to resilient leasing demand and a decline in new supply. Rental growth picked up 1.4 percent quarter-over-quarter — 4.7 percent year-over-year — the strongest quarterly gain since the third quarter 2011.
In retail, sales growth supported an uptick in retail leasing activity, with broad-based demand recorded, led by the food and beverage sector.
Logistics leasing demand was healthy during the second quarter 2018, driven by e-commerce and 3PL firms. Upbeat markets included Greater Tokyo and tier I cities in China. Rental growth continued to show strong momentum, rising by 0.8 percent quarter-over-quarter, led by outperforming Pacific markets.
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