Capital Markets & Investment Services

Asia Pacific Market Snapshot | Q4 2020

Capital Markets & Investment Services

Asia Pacific Market Snapshot | Q4 2020

REGIONAL OVERVIEW

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.

 

REGIONAL TRENDS

 

Korea property market buoyed by office segment

Sale of Parc1 Tower II office building for KRW1 trillion (US$900 million) marks the largest single asset transaction of the year

taiwan management of covid-19 aids markets

Commercial property transaction volumes for 2020 reach TWD143 billion
(US$4.9 billion), highest on record

ACTIVITY RAMPS UP IN SINGAPORE

Renewed confidence among investors and developers ensures a strong end
to Q4 with transactions worth S$24.72 billion (US$18.65 billion)

INDIA SEES STRONG recovery across asset classes

Office sector witnesses two large transactions of over US$1 billion each

e-commerce powers china markets

In Beijing, transaction volumes rise 9% QoQ to RMB6.5 billion (US$1 billion),
with the online industry accounting for 88% of total

economic rebound boosts investor confidence in australia and new zealand

Australia’s economy recovered sharply to grow 3.3% in Q3, while New Zealand’s economy expanded 14%, indicating improving investor sentiment and setting the stage for a positive start to 2021

 

Market Overview: Asia

Beijing

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In Q1 2021, investors will remain interested in income-producing offices and business parks. New Grade A offices and business parks are forecasted to peak in 2021, which will provide a window of opportunity for investors who are interested in Beijing.

Chengdu & Xi’An

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In the upcoming quarter, investors looking into Chengdu will be interested in opportunities across the office, apartment, mixed-use, and retail sectors. In Xi’An, institutional investors are expected to remain prudent, and will focus on income-producing offices with high yields, while end-users will remain active due to the demand for space.

hong kong

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The Hong Kong SAR government’s decision to abolish the Double Stamp Duty (DSD) on commercial properties has helped the real estate market, with both the retail and office segments to witness a QoQ increase of 187% and 98%, respectively, in Q4 transactions.

INDIA

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Marked by pent-up demand, the commercial sector in India has performed strongly across residential, office, and industrial asset classes this quarter. Significant movements in the warehousing sector were also observed due to a spurt in e-commerce.

Indonesia

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Landed housing, especially for affordable houses priced under USD70,500, remains resilient. Bright spots for investments are in logistics facilities and data centres, with opportunities in the new development of this space for operators and developers to build new facilities for end-users.

Japan

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As occupier strategies remain uncertain for 2021, the office market outlook is neutral, with increasing pressure on rents. Logistics assets continue to be highly sought after, which is also reflected in high demand from e-commerce providers and operators.

KOREA

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Despite macroeconomic uncertainties from COVID-19, investment activity in the Seoul office market remained vibrant in Q4. With the closing of several major transactions, total transaction volume for the quarter reached USD3.4 billion.

Myanmar

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Following a successful national election in November, Myanmar has seen renewed confidence amongst investors and a more positive outlook for this market. Foreign investors appear undaunted by economic concerns surrounding COVID-19, as inflows of direct investment are high, with USD300 million anticipated in this quarter alone.

PEARL RIVER DELTA - SOUTH CHINA

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Activity in the South China market was relatively moderate in Q4, with two transactions totaling USD249 million. In early 2021, investors are expected to focus on business parks, logistics, and the office sector.

Philippines

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Data from the Philippine Central Bank showed that cash remittances sent by Overseas Filipino Workers (OFWs) grew by 9.3% in September 2020, the most in 29 months. This should have a positive impact on retail spending and demand for affordable to mid-income residential units across the country.

SHANGHAI

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The quarter saw 10 transactions totaling USD2 billion, up 57% QoQ, with domestic investors and end-users more active. In Q1 2021, investors will continue to focus on business park opportunities with stable income and value-odd potential, as well as the diversifying of assets into logistics and data centres. ​

​ ​ Singapore

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Deal activity in H2 accounted for about three-quarters of the total transaction value of USD18.65 billion for 2020, signaling that investment interest in the Singapore market is gaining momentum going into 2021.

TAIWAN

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Due to strong exports and the successful management of COVID-19, Taiwan’s economy has remained stable this quarter. Total transaction volume in Q4 for commercial property reached USD1.5 billion, while combined commercial property transaction volume for FY2020 has hit a new high of USD4.9 billion.

​ Thailand

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In Q1 2021, the focus will remain on Thailand’s hospitality sector, with COVID-19 vaccinations launching globally and countries continuing to re-evaluate its entry policies. A moderate increase in office assets is to be expected, partly due to the current downward pressure on office rental rates that has prompted owners to cash in on their assets. ​

​ Vietnam

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Following Vietnam’s success in limiting the effects of COVID-19, the country’s residential property market, industrial and logistics sectors are extending further to international funds and institutional investors.

Market Overview: Australia & New Zealand

Auckland

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New Zealand’s economy has performed far more strongly than anticipated in early 2020. Low interest rates and growing investor confidence are driving competition for a limited number of assets, resulting in yield compression. Despite this, the country’s assets continue to provide attractive returns.

Brisbane

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An estimate of 97% reduction in investment activity was recorded in 2020 as interstate and border restrictions, as well as limited border occupancy, discouraged flow of capital into the market. An increase in investment activity during H1 2021 is expected once domestic borders have reopened for travel.

Melbourne

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Q4 was an extremely positive quarter as Victoria emerged from lockdown. As confidence returns, a deeper buyer pool for the Melbourne office sector is expected, with continued interest from offshore investments and the return of listed REITs, whose share prices precluded them from much activity in 2020.

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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Market confidence has returned with the economy expanding by 3.3% in Q3, following a contraction due to lockdowns in Q2. Q1 is typically a low-volume quarter, but an increase in demand for office assets is to be expected, with core grade assets garnering the most attention from investors.

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 | Q3 2020

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Asia Pacific property markets continued to regain momentum as investors bet on the region’s long-term potential.

Asia Market Snapshot | Q2 2020

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Investor appetite and activity have held up and there are signs of recovery on the horizon despite market volatility and economic uncertainty continuing to weigh on property markets throughout Asia Pacific in the second quarter.

Asia Market Snapshot | Q1 2020

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The effects of COVID-19 were of course the main factor impacting the Asia Pacific property market in the first quarter.

APAC Market Snapshot | Q2 2020

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Investor appetite and activity have held up and there are signs of recovery on the horizon despite market volatility and economic uncertainty continuing to weigh on property markets throughout Asia Pacific in the second quarter.

ASIA MARKET SNAPSHOT | Q4 2019

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The fourth quarter of 2019, marked by geopolitical uncertainty like the rest of the year, was a mixed bag.

Asia Market Snapshot | Q4 2019

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The fourth quarter of 2019, marked by geopolitical uncertainty like the rest of the year, was a mixed bag.

 

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For​ informationand​ inquiries,​ please​ contact​ us

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richard.kirke@colliers.com

 

 

 

CHINA

Tammy Tang

Managing Director | China

 

Jimmy Gu

China – East China

jimmy.gu@colliers.com

 

 

 

CHINA

Tammy Tang

Managing Director | China

 

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Executive Director | Research

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Managing Director | Occupier Services

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Managing Director | Valuation & Advisory Services

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