Asian property-investment markets enjoyed a stronger second quarter of 2009 followin a subdued start to the year, with ddirect real-estate investment volume edging up 41 pern cent from the first quarter, according to international property firm CB Richard Ellis.

To a certain extent, the firm said, the improved turnover was due to debtfunded owners compromising at current price levels and liquidating their assets to service near-term debt obligations.

Despite the improvement in the second quarter, transaction volume remained thin in the first half of 2009 compared to the year before, falling by 58 per cent year on year to about US$12.4 billion(Bt422.21 billion).

Investor sentiment in the region generally turned more positive as the first half of the year progressed. Hong Kong, Singapore and Taiwan experienced the largest quarterly rebound in transaction volume, up by 302 per cent, 297 per cent and 151 per cent respectively in the second qua5ter. The same quarter also witnessed a rise in land acquistions in China as big local developers scrambled to snap up land for future development in anticipation of the imminent appresciation of land prices.

Direct rea-estate investment in the region was concentrated in a selected number of countries, with the market dominated by Japan, which accounted for 44 per cent of total trunover. China and Hong Kong represented 18 percent and 15 per cent respectively.

CB Richard Ellis said that despite the significant contraction of total invesftment turnover in the first half of 2009, India and Taiwan ended the six-month period with positive year-on-year growth, surging by 339 per cent and 12 per cent respectively. The change in investor sentiment in Taiwan resulted primarily from the opening of the domestic market to mainland Chinese investment. In India,the formation of a stable government coupled with the use of Qualified Institutional Placement (QIP)by real estate companies to raise new funds provided a boost to the domestic property-investment market.

LARGEST TRANSACTION
The largest transaction concluded during the review period was AIG's sale of its Tokyjo headquartes, the AIG Otemachi Building, to Nippon Life for US$1.3billion. Eight of the ten largest deals in Asia during the first half involved domestic buyers.

Prime office properties continued to attract the strongest interest form invesftors, accounting for 55 per cent of total turnover for the six-month period, followed by the retail sector, which accounted for 16 per cent of total volume. The sale of the Sogo Shinsaibashi Store in Osaka City for about US$384 million was the larest retail investment transaction during teh period.

The stron rebound in prices in a number of Asian markets began to subside slightly during the second quarter.

According to CB Richard Ellis's Asian Office Yield Index, which reflects the changes in prime-office yields in major Asian cities, overall prime-office yields edged dowwn during the second quarter by 51 basis points to 4.59 per cent,after rising for three consecutive quarters. Hong Kong, Singapore,Bangkok and Taipei witnessed the largest yield compression.

Since the beginning of the kyear, central banks across the region have increased money supply and lowered policy rates in a bid to ease pressure caused by the credit shortage and restore inter-bank lendin activity While a number of developers and real-estate investment tursts susccess fully obtained fresh capital from stock markets during the review period, lenders remained cautious and demanded lower loan-to-value(LTV) ratios for property financing and refinancing.

There were no whole-building sales in Bangkok in the second quarter, due to few buildings being offered for sale rather than lack of demand, according to CB Richard Ellis's executive director and head of investment and land services, Kulwadee Sawangsri.

Demand has continued for development sites for condominiums both in Bangkok's central business district and along mass-transit routes. There has been no evidence of a decrease in prices for land in central areas.