Dedicated locality research platform
Enter your email address and you will receive
a link to reset your password
Amidst the current conditions within the market, those seeking favourable risk-adjusted returns in the realm of commercial real estate across the Asia Pacific (APAC) region are advised to adopt a stance of patience and diligent choice. According to CBRE's analysis, the landscape of investment in the APAC commercial real estate sector has grown intricate due to a protracted sequence of escalating interest rates, inadequate price adjustments, and a recuperation in mainland China that has progressed more sluggishly than initially foreseen.
In response to these variables, CBRE has revised its previous estimate, now suggesting a potential reduction of 15% in the total volume of investments within the APAC commercial real estate sphere for the entire year. A potential resurgence is not foreseen until the first half of 2024. Notwithstanding these trials, CBRE adheres to the perspective that investors can still harness the potential of cyclic investment opportunities, fuelled by the envisioned augmentation of yields in the latter portion of 2023.
Projections indicate that Australia is poised to experience the most substantial surge in yields, while Japan's favourable performance is anticipated to persist. Additionally, Korea is exhibiting early signs of recovery, bolstered by the declining cost of financing. DWS also maintains a relatively positive perspective on these three markets, with particular emphasis on residential built-to-rent (BTR) properties and prime logistics in Australia. DWS is also closely monitoring regional sectors in Japan and Korea where vacancy rates remain exceptionally low.
Upon delving into specific sectors, DWS foresees prime logistics assets outperforming, yielding annual total returns spanning from 7.5% to 9%. Simultaneously, the enduring momentum of e-commerce is driving demand for leasing in regional logistics, propelled by a shortage of modern warehouses across numerous cities in the APAC region.
In their analysis, cities like Sydney, Melbourne, Brisbane, and Singapore emerge as alluring prospects in this sector due to their robust anticipations for rental growth. Furthermore, regional urban centres in Korea and Japan offer promising avenues for pioneering investments.
In terms of office leasing, CBRE's forecast indicates a potential reduction of up to 5%, driven by decreased demand in mainland China. Nevertheless, the trend of gravitating towards high-quality and eco-friendly buildings is expected to persist prominently. Ada Choi, the head of occupier research for CBRE in APAC, elucidated that as vacancy rates hit a 20-year peak in the first half of 2023 and are anticipated to rise further for the rest of the year, market dynamics will remain favourable for tenants. This is due to the wealth of options available for upgrading.
Within the office sector, DWS holds the viewpoint that the presence of millennial workers will underpin the success of value-added strategies. These strategies encompass endeavours to enhance assets, introduce next-generation office features, incorporate elements of biophilic design, and create collaborative spaces. The asset management firm anticipates that redevelopment strategies, especially for underutilized office spaces, will yield enhanced development margins, although this approach also entails heightened risks.
Furthermore, DWS lends support to the notion of multi-family housing as a modest yet noteworthy market with investment potential. This stance is reinforced by the prospect of tax incentives being extended to new residential built-to-rent (BTR) projects starting in 2024. The potential for robust rental growth is expected to establish a sturdy foundation for investment returns, as highlighted by the firm. However, it's essential to acknowledge that accessing properties of institutional grade might entail some developmental risks.
Propscience is India’s dedicated property news portal. We cover the latest events, news, trends, deals, new launches and more.
All our services and tools are completely free of cost and available 24X7!
We use cookies to give you the best possible service while using our website, please click accept and carry on browsing if you're happy with this. For more information see our Privacy Policy.
Okay, Got it!This disclaimer ("Disclaimer") is applicable to the entire Site. Upon entering the Site it is recommended that you immediately read the Terms and Conditions and Privacy Policy listed therein. Your continued usage of this Site will indicate your unconditional acceptance of the said Terms and Conditions and Privacy Policy. You hereby agree that Propscience reserves the right to modify at any time, the Terms and Conditions and Privacy Policy governing this Site without prior notification. Your usage of the Site implies that you will be bound by any such modification. You agree and acknowledge that it is your responsibility to periodically visit the Site and stay updated with the Terms and Conditions and Privacy Policy of the Website.
The information contained in this Site has been provided by Propscience for information purposes only. This information does not constitute legal, professional or commercial advice. Communication, content and material within the Site may include photographs and conceptual representations of projects under development. All computer-generated images shown on the Site are only indicative of actual designs and are sourced from third party sites.
The information on this Site may contain certain technical inaccuracies and typographical errors. Any errors or omissions brought to the attention of Propscience will be corrected as soon as possible. The content of this Site is being constantly modified to meet the terms, stipulations and recommendations of the Real Estate Regulation Act, 2016 ("RERA") and rules made thereunder and may vary from the content available as of date. All content may be updated from time to time and may at times be out of date. Propscience accepts no responsibility for keeping the information in this website up to date or any liability whatsoever for any failure to do so.
While every care has been taken to ensure that the content is useful, reliable and accurate, all content and information on the Site is provided on an "as is" and "as available" basis. Propscience does not accept any responsibility or liability with regard to the content, accuracy, legality and reliability of the information provided herein, or, for any loss or damage caused arising directly or indirectly in connection with reliance on the use of such information. No information given under this Site creates a warranty or expands the scope of any warranty that cannot be disclaimed under applicable law.
This Site provides links to other websites owned by third parties. Any reference or mention to third party websites, projects or services is for purely informational purposes only. This information does not constitute either an endorsement or a recommendation. Propscience accepts no responsibility for the content, reliability and information provided on these third-party websites. Propscience will not be held liable for any personal information of data collected by these third parties or for any virus or destructive properties that may be present on these third-party sites.
Your use of the Site is solely at your own risk. You agree and acknowledge that you are solely responsible for any action you take based upon this content and that Propscience is not liable for the same. All details regarding a project/property provided on this Site are updated on the basis of information available from the respective developers/owners/promoters. All such information will not be construed as an advertisement. To find out more about a project / development, please register/contact us to visit the site you are interested in. All decisions taken by you in this regard will be taken independently and Propscience will not be liable for any such loss in connection with the same. This Site is for guidance only. Your use of this Site - including any suggestions set out in the Site and or any use of the resources available on this Site, do not create any professional - client relationship between you and Propscience. Propscience cannot accept you as a client until certain formalities and requirements are met.
We use cookies to give you the best possible service while using our website, please accept it and continue browsing if you're happy with this. For more information see our Privacy Policy