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New Zealand lead’s Asia Pacific in Attracting Real Estate Investment



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New Zealand Attracting Real Estate Investment

Australasian cities are punching above their weight to attract the highest proportion of real estate investment in Asia Pacific, according to JLL’s Investment Intensity Index.

The report, which compares the volume of direct real estate investment over a three-year period to the economic size of a city, reveals that four out of the top five cities in the rankings are in Australasia. Sydney and Auckland take the top two spots, followed by Melbourne and Brisbane with Tokyo rounding out the top five.

Justin Kean, Head of Research at JLL New Zealand says, “Cross-border investment has played an important role in New Zealand’s investment intensity. The share of cross-border investment are above regional average in New Zealand indicating our increasing attractiveness as an investment destination for capital. Some reasons for our appeal are our few government restrictions for foreigners buying assets and robust office pipeline that provides opportunities to buy Grade-A assets.”

Kean continues, “Real estate transparency is a major consideration for investors and seems to be another major factor behind the strong demand for commercial properties in New Zealand. New Zealand is well represented in the survey as we are one of the most transparent real estate markets in Asia Pacific, due to attributes such as our good market data availability, fair transaction process, high standards in regulatory, accounting and corporate governance.”

In addition, prime office yields in Adelaide, Perth, Auckland and Brisbane ranged between 7 and 8 percent, the highest among the top ten, making these​ highly attractive to investors.

“The Trans-Pacific Partnership will improve our link with the other regions and will have a huge impact on the connecting of capital for real estate, painting a positive future for commercial real estate market in New Zealand, adds Kean.

Tokyo attracts the highest volume of annual direct real estate investment in the region at US$21.9 billion. However, as a proportion of city Gross Domestic Product (GDP) this represents 8 percent as opposed to 11.5 percent for Auckland.

On average, commercial real estate assets worth 10 percent of city GDP change hands every three years, according to the report.

Aside from Tokyo, the other Asian cities in the top 10 are Hong Kong, Taipei and Singapore. 

Top ten Asia Pacific cities in JLL’s Investment Intensity Index

​1)      Sydney
2)      Auckland
3)      Melbourne
4)      Brisbane
5)      Tokyo
6)      Hong Kong
7)      Taipei
8)      Singapore
9)      Adelaide
10)    Perth​