Transaction volume in property investment market to reach $20b in H2: Colliers

This will bring total volume to $30b, down 19% YoY.

Colliers is projecting transaction volume in the property investment market to reach $20b in the second half of the year (H2) coming from a low base in the first six months of year as sellers become more realistic and more distressed deals take place. 

In its quarterly report, Colliers said possible US Fed interest rate cuts will also boost buyers’ confidence to enter the market.

“Other than cash-rich investors, family offices and credit funds are also actively looking for new opportunities yielding at least 5% in the market. Apart from asset or share deals, buyers may also consider more complex transactions which will likely become more attractive in H2,” it added.

Colliers’ projection will bring total volume for the year to $30b, which is down 19% from the previous year.

As of the second quarter, Colliers said commercial real estate investment sentiment remained subdued in the second quarter (Q2). Despite a 175% quarter-on-quarter (QoQ) increase in the number of big-ticket deals, most of these were less than $200m, and the total investment volume dropped 4.6% QoQ to $5.3b.

Distressed or discounted assets deals accounted for 50% of big-ticket deals in the second quarter. Some deals even closed with sellers suffering from a capital loss of around 60% compared with their purchase price in 2017–20018, Colliers said. 

“Luxury residential sales were stimulated by the removal of cooling measures in February, but banks’ cautious approach on mortgage approvals crimped transaction activities towards the end of the quarter compared to March and April,” the report read.