Connect with us on
Connect with us on
CBRE’s 2023 Asia Pacific Real Estate Market Outlook Mid-Year Review reviews the predictions we made at the beginning of 2023, and reveals our outlook for the rest of the year.
Our original forecasts from January were largely correct, although the subdued impact of mainland China’s re-opening has led us to push back predictions for the expected timing of the recovery by 6 to 12 months. While leasing momentum in occupier markets is strengthening, the investment volume is unlikely to recover before H1 2024.
This report explores the key trends and forecasts that will shape Asia Pacific’s commercial real estate market for the rest of the year and beyond.
Economy
Core inflation along with a stronger than expected employment market have reduced the likelihood of a hard landing in the U.S., with CBRE expecting mild negative growth to occur in Q4 2023 and Q1 2024. With the upward interest rate cycle having been prolonged, rates are likely to stay high for longer.
Investment
Asia Pacific commercial real estate investment volume is unlikely to recover before H1 2024 due to insufficient yield expansion and the higher cost of finance. Japan will remain attractive to investors on the back of low interest rates and positive carry, and hence will continue to outperform. Investment sentiment elsewhere is expected to improve once the cost of borrowing starts to come down. Korea, which was the first market to implement interest rate hikes in the current cycle, is now witnessing an increase in investment activity now that the cost of finance has begun to fall.
Office
While CBRE’s market forecast has been largely accurate, the recovery of office space demand has lagged office-based employment growth. Office occupiers retain a prudent attitude towards portfolio planning amid the challenging macroeconomic environment. Although flight to quality and a focus on green buildings remain key trends, expansionary sentiment has been subdued.
Logistics
Although logistics demand continues to gradually moderate from pandemic-era highs, regional rents displayed resilience in H1 2023, with performance bifurcating between tightly supplied markets, such as Singapore (prime) and the Pacific, and oversupplied locations. Rental growth in markets with a supply shortage will nevertheless lose momentum as demand tapers off.
Retail
The tight job market and resumption of international tourism underpinned strong consumer spending in H1 2023, boosting expansionary sentiment among retail occupiers.
Hotels
However, the slow return of mainland Chinese tourists continues to weigh on the recovery; a trend that is also impacting hotels, with the recent rise in room rates now showing signs of plateauing.
This report was originally published in https://www.cbre.com/insights/reports/2023-asia-pacific-real-estate-market-outlook-mid-year-review
Download the Report Read More
The real assets sector in the Asia Pacific is undergoing rapid transformation due to technological advancements, shifting demographics, and evolving investor preferences.
Governments in the region are introducing regulatory reforms to promote sustainable development and safeguard stakeholders' interests. Despite challenges, the region's fast-growing economies present ample opportunities for smart investors, especially with the focus on alternative asset types and sustainability initiatives.
Find out more about key regulatory developments for different markets in the APREA Real Assets Bulletin. The bulletin covers ongoing challenges and the actions that are being taken to mitigate them.
Download the Report Read MoreGlobal markets continued their journey of price discovery during Q1 2023, with investment activity subdued relative to previous years. The pricing alignment is most likely happening first in North America and Japan. For other locations, market yields/cap rates face another quarter of adjustments, before stabilizing.
Colliers Global Capital Markets - Insights & Outlook Report unveils the impact of interest rates on real estate pricing and investment volumes across the world. Aside from examining inflation trends globally, the report also analyses the impact on real estate pricing going forwards based on the Central Banks’ likely path on policy rates.
Over the coming months, we will be looking at markets by sector and providing fresh Asia Pacific insights along with global markets research.
Download the Report Read MoreSoutheast Asia (SEA) is expected to be one of the leading sources of growth for the global economy as the United States and Europe tiptoe around a potential recession. Cushman & Wakefield’s latest paper explores how SEA real estate market is positioned to develop given the latest economic and property trends. The report looks at the impact of China’s re-opening and rising interest rates and provide our views on investment opportunities, rents and capital value outlook for major property markets in SEA.
Download the Report Read MoreDespite the rapid change and uncertainty experienced worldwide last year, CBRE retains a relatively positive outlook for the Asia Pacific commercial real estate market in 2023.
From an economic perspective, inflation is expected to ease, and interest rates in the region are set to stabilise in the second half of 2023.
Office demand will be solid, driven by the recovery in mainland China, while retailers will adopt a positive, albeit prudent, approach to expansion.
Logistics demand is forecasted to pull back as e-commerce growth normalises, while hotel performance is expected to surpass pre-pandemic levels.
In the capital markets, investors will stay in wait-and-see mode until there is firm evidence that interest rates have peaked, with purchasing expected to pick up significantly in the second half of the year.
This report was originally published in https://www.cbre.com/insights/books/asia-pacific-real-estate-market-outlook-2023
Download the Report Read More
