Apac industrial investment down 34% q-o-q in 2Q2024: Savills
By Nicholas Lam
/ EdgeProp Singapore |
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A total of $10.5 billion in industrial deals was recorded across the Asia Pacific region in 2Q2024. This marks a 34% q-o-q drop in transaction value as compared to 1Q2024, according to a report by Savills.
The decline was underpinned by a lack of larger portfolio deals being made in 2Q2024 as compared to the first three months of the year. On a yearly basis, 1H2024’s performance dips just 11% when compared to 1H2023. According to Savills, Australia and South Korea were the best-performing major regional markets, while Singapore was “broadly stable”.
“There is interest in Singapore’s industrial properties, especially logistics space,” says Alan Cheong, executive director, research & consultancy at Savills Singapore.
Singapore’s prime logistics net yield in 2Q2024 is estimated to be 6.35% while Dubai stands at 7.5%, according to Savills. Yields are projected to grow over the next 12 months.
However, real estate investors in Singapore “face a flurry of questions and delays in turnaround time when answering to the questions posed by the authorities,” says Cheong. “This has stymied investments in this sector from reaching highs.”
Funds specifically targeting industrial and logistics assets raised $54.8 billion globally in 1H2024, a 30% increase from pre-pandemic levels. This could lead to a higher rebasing of transactional activity in the market, according to Savills.
Globally, close to $103 billion in industrial and logistics deals were completed in 1H2024, a 16% drop from 1H2023. Compared with the pre-pandemic period from 2015 to 2019, it still represents over 9% growth, says Savills.
The average deal size of industrial assets rose 11% in 2Q2024, suggesting a return of large-scale investors. This is supported by a recovery in buying activity from cross-border investors, the only major investor group to be net buyers of industrial and logistic assets in 2024 to date.
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