April is an exciting month in Asian real estate, as the global property consultancy firm Knight Frank publishes the first ever Prime Asia Development Land Index – a groundbreaking measurement of the development value of key real estate in Asia.
The land prices in the Index are derived by looking at what a reasonable developer would be expected to pay for development land, given the development value of the potential scheme, costs, required profit, acquisition costs, and relevant taxes.
There are some interesting results in Knight Frank’s first tracking of land prices in Asia. Since 2011, 24 of 26 Asian markets have witnessed an increasing land price. One of the fastest growers is the Indonesian capital, Jakarta. The general trend is of rapidly appreciating the land value in emerging Asian economies, with the more established Asian economies having reached a land value sufficiently high that redevelopment of existing land is becoming preferable.
Could this Index be a vital resource for developers and investors in the future? The findings are certainly interesting and original. Definitely one to watch to keep ahead of the trend.