China, Japan remain top targets for investors in Asia-Pacific retail property, JLL says

The amount of domestic and international capital aiming to invest in retail property in the Asia-Pacific is expected to grow this year, following the already “prolific activity” witnessed last year, JLL says.

In its latest report on the outlook in the region for investment in the sector, the international property consultancy highlights the likely imbalance of demand and supply for the rest of the year.

The increasing weight of capital targeting the region, driven in part by new fundraising, will be met with a limited availability of retail property in which investment can be made, JLL says.

While the investor community is expected to heavily acquire Japanese retail assets this year, China is still their focus, the report says.

But investors will be increasingly cautious in buying into second- and third-tier Chinese cities, it says, because many of these are facing oversupply of properties and a strong development pipeline.

“As the global economy finally appears to be gaining momentum and shaking off the effects of the [global financial crisis], there will be both challenges and opportunities for investors looking at retail real estate in Asia,” said David Raven, lead director for retail investment, Asia-Pacific capital markets, at JLL.

“However, as we look forward to the rest of the year with a positive forecast, the sector continues to offer a strong opportunity for strategic sellers.”