Commercial real estate in Asia Pacific continues to offer attractive returns to investors, led by office properties.
This is according to the latest all-property DTZ fair value index for the third quarter.
The index measures the attractiveness of commercial real-estate markets around the world.
While the overall index score for Asia Pacific has dipped only slightly, suggesting a small drop in attractiveness, a number of markets in the region have seen more pronounced declines.
All three segments of Hong Kong’s commercial property market — retail, industrial and office — went from “hot” to “cold” during the quarter because of large jumps in capital value, DTZ said.
Markets that continued to be hot include all three segments of Singapore commercial property as well as Bangalore office and Melbourne industrial.
Sydney industrial, which was “warm” in the second quarter became a hot market in three months to September, the property services firm said.
DTZ also said there has been a slight shift in investment prospects across sectors.
Industrial properties, which have been buoyed by a strong recovery in exports, now offer more opportunities than retail.
However, offices still remain the most attractive real-estate segment in Asia Pacific.
DTZ said the outlook for office properties in Asia Pacific improved markedly in the third quarter in key locations such as Singapore.
It added that average prime rents are forecast to increase nine per cent this year, and between six and eight per cent from 2011 to 2014.
Source : Channel NewsAsia – 19 Nov 2010