Regional Trends
TAIWAN
Commercial transactions jump 241% YoY to TWD44 billion (USD1.5 billion)
HONG KONG
Industrial asset sales rise 53% QoQ and 20% YoY to HKD5.4 billion (USD694.8 million)
SINGAPORE
Investment sales climb 26% QoQ to SGD3.8 billion (USD2.82 billion)
KOREA
Major office transaction volumes reach KRW2.4 trillion (USD2.1 billion)
BEIJING
Guangzhou sees record-high logistics investment worth RMB7.23 billion (USD1.1 billion)
AUSTRALIA
Leasing inquiries in the Sydney CBD hit five-year highs
Market Overview: Asia
Beijing
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Q1 recorded nine transactions, higher than the total number recorded in H2 2020. Due to buyers’ rising risk control and preference for strong liquidity, total transaction value was down 22% QoQ. In the upcoming quarter, the focus area will be on office assets in Zhongguancun, Shangdi, and in the CBD.
Chengdu & Xi’An
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Eight deals were finalized in Q1, with interest in office and retail properties likely to remain high. In Chengdu, end-users will remain active, while investors will look to focus on office, retail and mixed-use opportunities. In Xi’An, institutional investors will prioritise income-producing assets in central areas.
hong kong
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Industrial assets witnessed a resurgence in sentiment with transaction volumes reaching HKD5.4 billion in Q1, up 53% QoQ and 20% YoY. Investors looking to capitalize on local demand will focus on defensive assets while those seeking long-term income will turn to the logistics, cold storage facilities and data centres.
INDIA
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Residential and commercial assets saw healthy demand for the quarter. Investors remain bullish over medium to long-term prospects and are looking to invest in graded commercial assets, as well as forward greenfield assets at attractive valuations.
Indonesia
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Indonesia’s smooth roll-out of vaccines and implementation of the Omnibus Law, as well as several initiatives by the government, should strengthen purchasing power, improve market confidence, and encourage investment.
Japan
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Despite a renewed state of emergency in major metro areas, Q1 saw large transactions across the logistics, residential, and office sectors in the Japan market, marked by robust activity from cross-borders investors.
KOREA
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Supported by low interest rates and abundant liquidity, interest in the Korean real estate market remains high. Domestic and foreign investors’ interests in logistics assets continue to grow, which will depress yields as prices rise.
Myanmar
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While Myanmar’s ongoing political turmoil has caused major economic setbacks and will affect the near-term outlook, the long-term growth potential for the market remains largely intact, especially in the infrastructure and industrial sectors.
PEARL RIVER DELTA - SOUTH CHINA
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Industrial and logistics assets continue to stand out in Shenzhen and Guangzhou. In Q2, niche assets such as logistics, healthcare and data centres will be favoured in Guangzhou, whereas industrial renewal opportunities and self-use transactions will be sought after in Shenzhen.
Philippines
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The Philippines economy shrunk for the first time in 2020 since 1998. Despite this, projections are for a rebound of 5.9% to 9.6% in 2021. Following the easing of quarantine restrictions and the deployment of vaccines, the property market is looking to have a positive recovery.
SHANGHAI
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Eleven transactions were completed in Q1, with end-users remaining active in the office sector and investors looking into business park opportunities. Business parks will continue to see active interest from both foreign and domestic investors looking into good locations with value-add potential.
Singapore
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The industrial sector emerged as a major mover in Q1, largely attributed to the Boustead Industrial Fund. Transaction activity is expected to pick up in Q2, as optimism on business conditions continues with vaccine roll-outs and the gradual recovery of normal business activities.
TAIWAN
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Strong export growth has triggered expansion needs from manufacturers, which has resulted in the office and industrial sectors remaining as the major market drivers for the Taiwan market in Q1. The market’s solid fundamentals and robust economic outlook should also strengthen the commercial property market in the coming quarters.
Thailand
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Thailand is witnessing higher levels of market activity, especially in the logistics, warehousing, and industrial sectors, but a rebound in the hospitality sector will depend on the resumption of international travel.
Vietnam
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Vietnam’s property market is in the midst of a rebound supported by government reforms. With real estate investment procedures becoming more efficient and less bureaucratic, the market is seen returning to normal and even reaching new development peaks.
Market Overview: Australia & New Zealand
Auckland
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Investor sentiment is improving, buoyed by the start of New Zealand’s vaccine rollout and the prospect of a gradual reopening of the border. Demand for commercial property assets has also been bolstered by a low interest rate environment.
Brisbane
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The Brisbane CBD office market outperformed all others nationwide in 2020, with the lowest percentage increase in vacancy, and is forecasted for significant growth in H2 2021. Leasing demand has improved with the ongoing flight to quality, and investment activity is expected to have a significant increase in the second half of 2021.
Melbourne
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Sentiment has improved markedly in 2021, with off-market interest across the spectrum rebounding. Investors are likely to consider development or value add, while leasing risk is to be approached with caution, following the removal of the JobKeeper wage subsidy.
Brisbane
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The COVID-19 outbreak has seen significant disruptions to new acquisition decisions and institutions are undertaking a revaluation of their real assets’ portfolios. Over-allocation to real assets, redemptions, and the denominator effect will be interesting to watch for the remainder of 2020.
Sydney
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Confidence levels grew as the markets reopened, which allowed vendors and investors to review acquisitions following changes in the investment environment. In Q2, transaction volumes are expected to rise as several current and upcoming campaigns are finalised.
Melbourne
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Melbourne began the year as the strongest office market in the country, with an average vacancy rate of 3.2% (2% in Prime category). Due to the COVID-19 pandemic, a softening in pricing is expected in the upcoming quarter and investors are anticipated to look most favourably on core assets with defensive tenancy profiles, rather than seeking secondary assets in distress.
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Past Insights
APAC Market Snapshot | Q4 2020
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Most property markets in the Asia Pacific region ended a challenging year on the path to recovery, thanks to strong performances by the office, industrial and logistics segments. In the upcoming quarter, investors are expected to act quickly to make the most of a conducive environment as markets across the region emerge from lockdowns and economies regain momentum.
Asia Market Snapshot | Q3 2020
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Asia Pacific property markets continued to regain momentum as investors bet on the region’s long-term potential.
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