Retail sector drove a 22.6% property investment rebound in Q1

Retail-related property transactions worth at least $100m grew by 15.4% year-on-year.

Total investment volumes of commercial properties worth $20m or above rose 22.6% year-on-year to $12.5b in the first quarter of the year as the impact of the pandemic eased, JLL has advised.

Sales of retail properties were seen as the “most active”, attributing to around 57% of total investment volume of commercial properties worth at least $100m.

JLL noted the proportion of transactions related to retail increased 15.4% y-o-y and up to 33.7% y-o-y, if transactions worth $20m or above are taken into account.

“Investors are interested in buying retail properties as the retail rents have dropped 72% from the market peak to the rental level in the fourth quarter of 2003 and are expected to stabilize,” Oscar Chan, Head of Capital Markets at JLL in Hong Kong, said.

“They believe it is probably the right time to buy retail properties as the asking prices have softened and the retail rents are expected to recover.”

Moreover, the industrial sector was also a key investment sector during the quarter. This comes as more overseas institutional investor engaged in the sector.

Amongst the major activities are Goodman Asia’s acquisition of two Samson Paper Company Limited properties for over $750m and Silkroad Property Partners’ acquisition of Smile Centre for $321m.

In contrary, investment in the office sector contracted quarter-on-quarter by 89.1%, in terms of transactions worth $100m or above.