Commercial property transaction volumes in Asia-Pacific fell at a faster clip of 6.7% in Q2, after rising by 3.5% in Q1 2022. The drop is attributed to the decline in domestic deal activity, which fell by 12.4% in Q2, a larger reduction from the 1.2% in Q1, according to new analysis by Knight Frank.

The firm says that this reduction in activity can largely be related to the fall in activity in the region’s biggest markets: Australia, China, Japan and Hong Kong. However, cross-border investments remained active, growing by nearly 15% in the first and second quarters of 2022.

Commenting, Christine Li, head of research, Asia-Pacific, said: “The global investment landscape has changed substantially in the first six months of 2022 with rising inflation and interest rate hikes. In response, investors are either pivoting their strategies or being more selective, resulting in a slowdown in deal-making.”

Transactions for offices swelled due to activity in Singapore and South Korea in the second quarter of 2022, rising from $21.8bn in the first quarter to $27.5bn, an increase of 26.1%. However, deal activity for logistics continued to soften as volumes fell 26.6% year-on-year to $3.5bn.