Thought Leadership

• The Asia Pacific flexible office space market continued to display cautious growth in 2022, with the total volume of flexible office space in the region reaching 76 million sq. ft. as of September, an increase of 6% y-o-y on 2021 and 15% on pre-pandemic levels.

• As of September, flexible office space accounted for about 4% of total office stock and 3% of total Grade A office stock in Asia Pacific. In the Grade A segment, India and Singapore reported the highest penetration of flexible office space, while most North Asian markets are just below 2%.

• Tech firms and business services companies remain the top corporate users of flexible office space. Interest is also growing among financial, life science and consumer product firms.

• Trends that will continue to shape the flexible office landscape in 2023 include:

1. Flexible space operators offering on-demand memberships to cater to more dispersed workforces resulting from the widespread adoption of hybrid work
2. Growing occupier demand for customised enterprise and turnkey solutions to mitigate rising fit out costs and CapEx constraints
3. The use of asset-light strategies as flexible space operators form partnership with landlords using management contracts

This report was originally published in https://www.cbre.com/insights/briefs/h2-2022-asia-pacific-flexible-office-market-deliberate-growth-continues

Almost three years after the onset of the global pandemic, the retail industry has been through one the biggest stress tests imaginable, but best-in-class real estate has remained robust – and even emerged stronger in some markets.

Cushman & Wakefield's flagship Main Streets Across the World report tracks the top retail districts across 92 cities and ranks the most expensive by prime rental value. An annual report until 2019, this year’s report is the first since then, allowing insight into comparative performance pre- and post-pandemic.

This quarter, the Knight Frank Data Centre report focuses on the growth markets of Asia Pacific. Market analysis includes Osaka, Melbourne, Jakarta, Manila, Hanoi, Taipei, and Indian cities Hyderabad, New Delhi and Chennai.

The growth trajectory of data centre supply noted in the principal global data centre markets in previous quarters is now being mirrored in secondary cities across the region. Underpinned by strong demand fundamentals and a trend towards greater localisation of data centre facilities, total supply (live, under construction, and committed capacity) in the reported APAC markets has grown from just under 700MW five years ago to over 3,000MW today. For the first three quarters of 2022 alone, around 600MW of new capacity has been added.

In this article, we explore an emerging sub-set of infrastructure which is garnering increasing amounts of interest from global private equity and pension funds – Educational Infrastructure or ‘EduInfra’. EduInfra refers to the infrastructure, building and land used to deliver social services like education.

EduInfra is attractive to international annuity investors looking for stabilized yield plays. The sector has an edge over other similar asset classes due to its non-GDP linked and rather recession proof character with significant potential for capital appreciation. It offers a promising 10 – 11% entry cap rate with rental escalations in the region of 3 – 5%. While the market boasts of significant depth, potential has not been unleashed as operators are only slowly moving towards asset light models.  EduInfra’s classification as infrastructure allows for tax optimal exit through InvITs which can also serve as a growth platform attracting institutional investors.

This was originally published in https://resolutpartners.com/2022/11/15/eduinfra-emergence-of-a-new-asset-class/