Bids data: behind the headlines on APAC investment activity

Source: JLL Research

Office deals were in decline — and when they did occur, price declines were recorded. In 1Q 2023, deals closed at a price 12.7% lower than asking. Key deals that drove this price discount were Concordian Building in Seoul, Osaka Bay Tower and 260 Queen Street in Sydney.

In 2Q 2023, deals closed 5.7% lower than the asking price. In Australia, 44 Market Street in Sydney traded at ~17% discount to book value. Meanwhile, in South Korea, office saw the least repricing relative to retail and logistics, owing to strengthening investor demand and increasing opportunities on the market.

Figure 2: Office Bid-Ask-Close Spread

Source: JLL Research

Over the past three years, there was a flurry of industrial deal activity, riding the e-commerce wave. Bids poured into industrial assets, with the average bid price 8.1% above asking, and deals closed at an average of 9.9% above the asking price in 2022. However, due to rising financing rates, large wave of new supply and slowing rental growth in certain countries, 2023 deal activity will likely diverge among APAC countries. Among the key sectors tracked, industrial price adjustment remained relatively resilient in 1H 2023, with bids closing 2.5% lower than the asking price (office 7.6% lower and retail 10.2% lower than asking).

Figure 4: 2022 Bid-Ask-Close Spread by Sector