Vendors drop prices of Asia-Pac commercial properties

August 26, 2008
Vendors drop prices of Asia-Pac commercial properties
These assets have been priced down by 25-100 bps in last few months:
DTZ
By UMA SHANKARI

COMMERCIAL properties in the Asia-Pacific region have been priced
down by 25-100 basis points in the past three to four months, more in
line with investor expectations, property firm DTZ said yesterday.

'The number is an average figure - it varies from market to market,'
said John Stinson, DTZ's regional director for sales and investments
and capital markets for Asia-Pacific.

Mr Stinson, who was speaking to reporters at a seminar, said the re-
pricing has been greater in some markets, such as Tokyo and
Australian cities.

For Singapore, it is hard to pin a number to the drop in the asking
prices for commercial properties, mainly because of a low number of
transactions, he added. But some sellers have marked down their
commercial assets about 10 per cent, said Shaun Poh, DTZ's senior
director for investment advisory services and auction in Singapore.

Mr Stinson identified Singapore as one of the 'gateway cities' that
international investors will look at when increasing their exposure
in the Asia-Pacific area.

'In the next two-three quarters, core (prime) products in gateway
cities - Hong Kong, Singapore, Tokyo and Sydney - will see some
interest,' Mr Stinson said.

In Singapore, the opportunities for investors are increasing as
vendors price their assets lower, he noted.

DTZ's executive director and regional head for consulting and
research Ong Choon Fah said: 'Owners are a bit more realistic now
than they were previously.'

Right now, there are still more sellers than buyers in Singapore,
according to a recent survey of investors by DTZ. More than 10 per
cent of investors had 'selling priorities' while less than 5 per cent
had 'buying priorities', the survey found.

'Buyers are sitting on their hands, waiting for the markets to
adjust,' said David Green-Morgan, DTZ's Asia-Pacific research
director.

DTZ's research also showed that across the Asia-Pacific region,
investors with 'buying priorities' outnumber those with 'selling
priorities' when it comes to industrial and hotel properties.

Mr Green-Morgan noted that investments into Singapore and the region
are likely to continue to be driven by private equity.

In July, DTZ predicted that the value of investment transactions
worldwide will fall to US$500 billion this year, from a high of
US$730 billion in 2007 and US$600 billion in 2006.

The decline assumes that after a weak first half in 2008, there will
be a relatively modest pick-up, likely to be driven mainly by the
Asia-Pacific market.