Thought Leadership

• Tenant enquiries and site visits increased in the surveyed period, largely driven by the retail and industrial sector. Activity in mainland China continued to be constrained by strict pandemic-related measures.

• Demand for both traditional and flex office space cooled as many occupiers switched to wait-and-see mode amidst the dimmer economic outlook. The appetite from industrial sector also decreased as respondents saw more consolidations.

• While the outlook for rents in Korea, Singapore and Australia turns more positive in the surveyed period, lagging markets like mainland China also expected a slower rental decline.

• Regional leasing sentiment remained largely stable. Although mainland China was the weakest performer, a more positive outlook is expected along with recent relaxation of zero COVID policy. Landlord strength continued to decline as the market shifted further in favour of tenants.

This report was originally published in https://www.cbre.com/insights/briefs/asia-pacific-market-sentiment-survey-december-2022

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In the first survey of its kind, CBRE polled more than 20,000 people worldwide – from Gen Z to Baby Boomers – earlier this year to understand how they will live, work and shop in the future, and how this will impact the real estate they use. Included in the survey were around 9,000 respondents from Asia Pacific.

The survey findings revealed fresh insights that can be harnessed to inform real estate occupier and investor strategies, and ensure that real estate is positioned to meet users’ evolving needs.

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KEY TAKE-AWAYS

• APAC countries continue to rank highly as locations of production, particularly due to the abundant supply of low cost of labour: of the top 12 locations, half are in APAC.

• Many of the countries that have slipped in the rankings compared with 2021 have done so due to increased costs (particularly for labour and electricity) and increased risk (economic, political and natural disaster); a number of these countries are in Europe where the war in Ukraine has had a significant impact on cost and risk factors.

• A wide range of countries have also experienced even greater constraints in the availability of labour as unemployment rates have continued to fall; this has affected countries across all geographic regions and states of economic development albeit key production locations in emerging APAC markets continue to benefit from expanding labour pools.

• A number of countries – particularly in Europe – have improved their ability to achieve sustainability targets, including efficient resources use and creating green economic opportunities, bolstering their longer term economic outlook and risk profile.

• U.S. companies are bringing jobs and supply chains home at a historic pace. American companies are on pace to reshore, or return to the U.S., nearly 350,000 jobs this year, according to a report published by the Reshoring Initiative.

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Q3 2022 Investment Trends features in-depth and up to date insights on demand drivers and other key investment trends in Australia, mainland China, Hong Kong SAR, Taiwan, Japan, Korea, India, Singapore, and New Zealand.

Key Trends

• Faster-than-expected interest rate hikes hinder acquisitions

• Purchasing led by real estate funds and institutional buyers

• Significant decline in logistics and hotel transactions

• Retail deal flow picks up

• Cross-border deals continue to rise y-o-y

• Fund-raising remains solid

• Investment activity is expected to weaken further

This report was originally published in https://www.cbre.com/insights/figures/asia-pacific-investment-trends-q3-2022

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