Cushman & Wakefield has released its Winning in Growth Cities report for 2014-15, and Tokyo has been named as the largest commercial property investment market in Asia.
The Japanese capital city reported 30.4 per cent increase in real estate investment which put it in the No. 3 spot in the world on the index.
In the year to June 2014, the top 25 cities on the index, which was led by New York City and London, were responsible for over half of the investment volume (52.3 per cent market share). The next 50 cities on the list only managed to capture a 14.3 per cent share.
Hong Kong is in second place in the Asia-Pacific region and is in 10th place overall.
Other Asian cities which placed in the top 25 worldwide include Sydney, Shanghai, Beijing and Melbourne.
Beijing is noteworthy for the fact that it made the most gains, jumping from 46th to 17th place this year.
Asian markets have been reaping the benefits of high real estate allocations from insurance firms and pension funds. There has also been some down market activity due to economic uncertainty in some markets, however.
Interest in the region has been strong over the past year and foreign investment has increased by 43 per cent.
The top international buyers in the Asian markets include investors from the United States, Canada, the United Kingdom and Germany.
John Stinson, the head of the Asia Pacific Capital Markets department at Cushman & Wakefield said that the core Asian markets are “generally outperforming.”
He pointed out that an expectation of low growth returns for the next few years is encouraging large Asia domicile funds and investors to redeploy in emerging markets or increase their allocation in Europe or the United States.
He predicted that higher levels of growth in the Asian core markets will attract more capital. At the same time, reforms in Japan, India and China will increase global investor confidence and result in higher capital flows.
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