Total commercial real estate investment volumes fell for the second consecutive quarter in 2011. The value of transactions fell by 37% to reach US$25 billion compared to Q1.
Investors became more cautious as the debt crisis in Europe and the USA intensified with many adopting a wait and see approach. Lack of investable product also prevailed, hampering trading volumes.
Activity slowed down significantly in all countries with double digit declines from Q1. Compared to the same period last year most countries posted a recovery. But in China and Japan the first half of 2011 is much weaker than in 2010.
Investors were favouring mixed-use property which accounted for more than half of all transactions in Q2. Outside China, offices still retained the largest share but investments in mixed-use schemes increased over the quarter.
The drop off in activity at the top end has reduced the average deal size with domestic investors continuing to secure over 90% of all assets traded.
With anti-inflationary policies now well entrenched in most countries across the region, it is expected that investor sentiment will remain muted for the remainder of 2011.
