Prime Asian land development slows

Prime Asian land development slowsPrime Asian land development has lost momentum in the first half of 2014 compared to its growth over the same period last year, with the slowdown in China primarily responsible.Knight Frank’s Prime Asia Development Land Index report shows that the index advanced 4.9 per cent for office sites and 2.9 per cent for residential sites during H1 2014. This represents a deceleration, however, when compared to H1 2013, when growth rates were 9.8 per cent and 7.7 per cent respectively.Knight Frank singled out China as the main cause for the decline in growth but noted that activity was down across all of Asia. It said that investment volumes in H1 2014 totalled only 37.6 per cent of the amount achieved over the whole of last year. But in terms of cross-border deals, investment inflow originating outside Asia during H1 2014 has already surpassed its total volume in 2013 by 76.1 per cent.Bangkok underwent the largest increase in the prime residential development land index in H1 2014. It was up 18.2 per cent in the period (20.3 per cent for the year to June 2014). Phnom Penh also exhibited strong growth, with an increase of 13.7 per cent in the period (25.0 per cent for the year). Jakarta, too, showed impressive growth, up 11.6 per cent in H1 2014 (23.6 per cent for the year).In terms of the prime office land price index, Bengaluru (also known as Bangalore) came out on top, with a figure of 9.2 per cent in H1 2014 (and 9.2 per cent for the year to June 2014). Mirroring their strong showing in the residential land price index, Jakarta and Phnom Penh performed well in the office index: Jakarta exhibited growth of 8.3 per cent in H1 2014 (17.8 in the year to June 2014) and Phnom Penh showed growth of 7.6 per cent for H1 2014 (14.7 per cent for the year).At the bottom of the Index, land prices of both residential and office sites in Hong Kong were down 4.9 per cent and 4.4 per cent respectively over the first half of this year. Knight Frank said this was due to a confluence of softened property prices as a result of cooling measures, elevated construction costs and an uncertain economy.