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Office: Macroeconomic headwinds and inflationary pressure weighed on office leasing activity in Q3 2022, pulling down net absorption by 11% q-o-q to 10.1 million sq. ft. NFA. Finance remained the main engine of leasing demand, with activity also seen from tech and co-working platforms. Rents increased by 0.4% q-o-q and 1.1% y-t-d.

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E-commerce has grown rapidly over the past five years, with expansion accelerating since the pandemic. Despite e-commerce penetration moderating from pandemic highs after restrictions were lifted, CBRE expects future growth in Asia Pacific to continue to outpace the rest of the world. Of the six key e-commerce drivers identified by CBRE, Asia Pacific possesses a distinct advantage in three: Urban population growth, adoption of digital wallets and a vibrant e-commerce ecosystem.

As the retail industry continues to evolve toward omnichannel, so too will the role and functions of physical stores. Retailers and landlords need to re-invent themselves to prepare for the evolution of retail and the rise of omnichannel.

The growth of e-commerce is also driving robust industrial & logistics property demand, although the supply pipeline is unlikely to meet future demand. Logistics occupiers are advised to explore build-to-suit developments and invest in the latest warehouse technologies. 

Key highlights from this report include:

  • CBRE forecasts Asia Pacific’s e-commerce penetration rate to grow to 35% by 2026. However, e-commerce penetration will vary across different product categories.
  • Korea, mainland China, Indonesia, Australia and Taiwan are expected to be the five most penetrated e-commerce markets in Asia Pacific by 2026.
  • While physical stores will remain essential, the rise of omnichannel is prompting many traditional brick-and-mortar retailers to consider new formats and locations.
  • Over the next five years, 100 to 130 million sq. m. of additional dedicated
  • e-commerce logistics space will be required to support the growth of online sales in Asia Pacific.

This report was originally published in https://www.cbre.com/insights/reports/Asia-Pacific-Report-Omnichannel-Retail-and-its-Impact-on-Asia-Pacific-Real-Estate-October-2022

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As the global economy continues to chart a path in the post-pandemic world, real estate investment has a new favourite buzzword – new economy assets. While the term arose with the advent of digital and internet technologies, amid surging inflation and rising interest rates, new economy assets have taken on a whole lot of significance.

So, what is so new about the new economy? A key dynamic is the integration of digital technologies that is overhauling old economy services and products, spurred innovative distribution channels and sparked new, high-growth industries that are plugged into the tech and science megatrends. Increasingly, digital transformation is shaping the way we live, work and play and the real estate sectors underpinning this megatrend is set for a multi-year upcycle.

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The Asia Pacific logistics & industrial market continues to perform strongly, underpinned by strong fundamentals – though there is emerging evidence that growth is switching from the investment market to the occupier market.

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The retail sector is considered a core asset class in the Indian real estate industry. Currently, it is recovering from the toughest business climate it has ever experienced due to the pandemic. Retailers, developers, and investors are taking cautious steps while delving into the segment, owing to 2 main factors – the e-commerce onslaught, and higher digital adoption among consumers.

There was a strong return to malls after restrictions were lifted. Revenues and footfalls of mall developers and retailers have largely recovered to pre-pandemic levels.

Cushman & Wakefield's latest report on a new journey for retail realty addresses:

Rebound – Retail real estate's current story
Revenge – As pandemic fears recede, a shopping culture has emerged
Re-Invent – Retailers and mall developers consider the adoption of digital & analytics and tech integrations

To read more about the journey of the retail sector of India’s real estate, read the report: Rebound, Revenge & Re-Invent.

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