Private equity raised in the first five months of 2016 stood at US$9.0 billion, an increase of 150% on the same period of 2015. However, this figure was skewed by a few large development funds, which collectively raised US$5 billion. The fund raising environment will turn more challenging over the remainder of the year.
The public equity market endured a volatile start to 2016. Total equity raised by Asia Pacific REITs fell by 23% y-o-y in the first four months of the year. J-REITs remain in acquisition mode, accounting for over 80% of total commercial real estate investment in Japan during Q1 2016, a trend which is expected to continue.
This year saw further rounds of monetary easing, with central banks in six countries cutting interest rates. The coming months are expected to see stronger purchasing activity in Japan amid the negative interest rate environment. Some landlords may opt to refinance rather than put their assets up for sale.
The first five months of 2016 saw strong public debt issuance totalling US$24.2 billion, a figure 43% of the full-year figure for 2015. However, recent bond default cases by state-owned enterprises in China have raised concerns about credit risks, with some developers putting bond issuance on hold.