Asia-Pacific’s commercial real estate transaction volumes fell 15% in the first quarter of this year – with government cooling measures and seasonal holiday factors taking their toll, JLL said.

The agent said transaction volumes slowed to $23.1bn (€16.7bn) in the first quarter – down 15% year-on-year – with Japan accounting for over half of deals. However, JLL maintained its forecast that 2014 would beat last year, with continued allocation of capital to the real estate sector and improving leasing demand.

Stuart Crow, head of Asia-Pacific capital markets at JLL, said: “While investment has been slightly muted by concerns around growth in emerging markets and renewed economic uncertainty in China, we expect transaction volumes to pick up throughout the year as a wave of closed-end funds mature and deals that are already in the pipeline come to market.”

Outperforming the rest of the region, transaction volumes in the larger markets of Japan and Australia grew by 15% and 31%, respectively, with Japan accounting for 53% (US$12.2bn) of direct investment in the region’s commercial real estate markets in the first quarter. Japan’s investment market was buoyed by an increase in the country’s consumption tax on first portfolio transactions, with investors buying before 1 April.

Large deals by foreign investors also contributed to Japan’s regional outperformance during the first quarter. While the consumption tax rise could slow investor appetite in the short-term, JLL said the general trend in Japan remained positive in both liquidity and transaction volumes with the market set to experience further strong growth in 2014.

Australia’s 31% year-on-year growth in transaction volumes was in line with expectations with foreign investors accounting for 32% of all deals. While investment during the quarter reached a $4.2bn, volumes were down 34% from a strong year-end in Q4 2013 and it is unlikely that overall investment activity in 2014 will match that of 2013 as both demand and supply slow, according to JLL.

Direct investment in China’s commercial real estate markets slowed slightly in the first quarter, down 18% year-on-year to $3bn. Debt markets, however, remain a concern with the high-profile default of a Chinese developer and stress in the Chinese economy.