Thought Leadership

Japan is the third most sought-after investment destination within APAC for Singapore-based investors, only trailing behind the Chinese Mainland and Australia.

Between 2013 and 2023, an estimated USD 16.2 billion has been injected into Japan's commercial real estate (CRE) market. Significantly, 12% of this capital influx occurred in the first half of 2023, highlighting a pronounced surge in investor interest.

How have the Japanese government's monetary policies impacted real estate investors?

The Japanese government's monetary policies to stimulate domestic inflation have proven to be a significant advantage for real estate investors. This is particularly evident as the Japanese yen has recently touched multi-year lows compared to major global currencies. This trend has created a favorable environment for those in the real estate market.

Despite recent adjustments to its yield curve control targets, the yen's depreciation against the Singapore dollar was unmistakably pronounced, hitting an unprecedented low in 2023. The added firepower has put Singapore as the top cross-border investor in Japanese real estate so far this year.

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Following the lifting of pandemic control measures at the end of 2022, China’s consumer market has rebounded strongly. National total retail sales of consumer goods grew by 8.2% y-o-y in H1 2023, with the contribution rate of final consumption expenditure to economic growth reaching a record-high 77.2%. Domestic demand is now firmly established as the main engine of economic growth.

At the same time, the impact of COVID-19 on the consumption, lifestyles, and values ​​of domestic residents is accelerating the emergence of structural trends that will have a far-reaching impact on the retail sector in areas ranging from store strategy to sustainable development. These trends will also influence demand for retail properties and asset management.

This report by CBRE identifies the main trends characterising China’s retail property market in the post-pandemic era and provides recommendations for retail occupiers, investors and developers preparing to navigate what will be a critical period for the cyclical recovery of China’s retail market and normalisation of domestic consumption.

This report was originally published in https://www.cbre.com/insights/reports/retail-in-the-post-pandemic-era-trends-and-opportunities

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Retail leasing demand in the world’s leading retail markets continues to rebound as economic activity recovers in the wake of the COVID-19 pandemic. The Tokyo retail market is no exception, with a resurgence in retailer demand having commenced in H2 2022.

In addition to existing retailers looking to increase their store numbers, several overseas brands have made their first ventures into the Japanese market. As was the case prior to the pandemic, Tokyo continues to be a preferred location for retailers seeking to establish or extend their store presence.

This report compares Tokyo with several of the world’s other major retail markets including New York, London, Paris, Milan, Shanghai, Hong Kong, and Singapore and explores the following factors that make Tokyo, and Japan as a whole, an attractive location for retailers to establish stores.

Tokyo: Rents are reasonable when compared to city GDP
Japan: E-commerce ratio as a percentage of total retail sales is low
Japan: Inbound tourist numbers and tourist consumption have demonstrated considerable scope for growth

This report was originally published in https://www.cbre.com/insights/viewpoints/tokyo-the-city-of-choice-for-retailers

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Asia Pacific is continuing to witness aggressive expansion across primary and secondary data centre markets with 9.7GW operational, 3.3GW under construction and 8.5GW in planned stages across the region.

The usual primary markets, Beijing, Hong Kong, Mumbai, Seoul, Shanghai, Sydney and Tokyo, continue to experience growth despite headwinds originating from a lack of land parcels and power availability. As a result, ancillary locations are being evaluated as part of expansion strategies. The moratorium’s cap on Singapore’s IT capacity has led to unmet demand in the market, which has spilt over into nearshore markets such as Johor, which is seeing a huge pipeline under development and commitments to land banks. Similarly, Greater Jakarta’s large pipeline is driven by its central geographic location in South-East Asia and the country’s immense population growth has sustained its appeal to major investors and operators.

Global cloud service providers (CSP) continue to show a marked interest in secondary markets across the region. Hyperscale CSPs have planned presence in the secondary markets of Auckland, Bangkok, Busan, Kuala Lumpur, Osaka, Pune and Taipei.  The tendency for colocation operators, developers and investors to follow CSPs into new frontiers with their own data centre deployments will see secondary markets attract new players and witness rapid growth over the next few years.

The Asia Pacific data centre region is experiencing varying speeds of development and so, for the first time, we have introduced our Asia Pacific Data Centre Markets Maturity Index, to track the evolution of a number of notable markets each quarter. This report will delve into 12 notable markets: Tokyo, Mumbai, Sydney, Singapore, Seoul, Johor, Jakarta, Hong Kong, Manila, Bangkok, Auckland, and Ho Chi Minh City.

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