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The office sector remains a key focus for Asia Pacific investors optimistic about the long-term fundamentals.

• Within APAC, Melbourne and Tokyo stand out on the path to value stability and recovery along with Copenhagen, Toronto and San Francisco at the global level. 

• While core offices remain a top pick for investors in APAC and EMEA, substantiated by current office investment volumes, there is a very different narrative in North America.

• Office occupancy levels in APAC are averaging 80%, and office density remains high. In Europe, occupancy is back to 65% and in North America, rates are at 50%.

• Seoul and Singapore recorded net absorption 30% above historical averages with both markets recording falling vacancy rates over 2022, contrary to most major markets globally. 

• Although limited sales transactions occurred over Q1 2023, we anticipate market sentiment will recover as an expected peak of the interest rate cycle comes to fruition over H2 2023 and equips investors and vendors with clarity and confidence regarding asset values and the cost of borrowing across the region.

While tenant enquiries and site visits remain frequent, momentum cooled from the previous survey. Although enquiries and inspections in mainland China were active, occupiers’ cautious stance resulted in a limited number of actual transactions.

Expansionary demand grew across the office and retail sectors but fell for industrial. Australia and Japan registered a rise in requirements for more space, while India continued to see robust new set up and expansion demand.

Two-thirds of respondents expect rents and incentives to stay flat. The view in mainland China is slightly negative, with rents forecasted to decline.

Despite falling slightly from the previous quarter, leasing sentiment in most markets stayed in positive territory. Sentiment in mainland China remains negative and will take more time to recover.

This report was originally published in https://www.cbre.com/insights/briefs/asia-pacific-leasing-market-sentiment-index-june-2023

Despite a challenging global economic environment and recent muted investment sentiment, the Asia Pacific commercial real estate market has remained largely resilient. In particular, the office sector remains an important asset class in the region, and one that investors should consider.

This report explores the opportunities presented by investing in the office sector in Asia Pacific, the supporting data and factors that differentiate this asset class from others, as well as the implications and potential strategies for investors.

Key highlights include:

• Deal flow in Asia Pacific remains resilient despite weaker investment sentiment
• The outlook for longer-term office demand is positive
• Asia Pacific is leading office attendance globally
• Price and rental correction has created a window of opportunity
• CBD offices can aid portfolio diversification

This report was originally published in https://www.cbre.com/insights/reports/asia-pacific-major-report-why-asia-pacific-offices-are-different-and-now-is-the-time-to-invest

Hong Kong SAR and Singapore are both firmly established as popular locations for multinational corporates to locate their Asia Pacific headquarters.

While the two cities have always enjoyed a competitive rivalry, recent sociopolitical developments and the enactment of anti-pandemic measures, although now abated, have prompted some companies to think about their operational and physical footprint in the region.

This report compares the two markets across seven key factors:

• Influence in Asia Pacific
• Scale of financial industry
• Scale of technology industry
• ESG and green building initiatives
• Talent availability and attraction
• Office rents/price
• Office availability

The report also discusses topical issues such as:

• How the two cities are set up to develop and grow in the post-covid world
• The competitive advantages of the two cities across industries
• Whether real estate pricing and rental gaps are narrowing, and by how much
• How the two cities will evolve over the next decade with reference to government master plans

This report was originally published in https://apacresearch.cbre.com/en/research-and-reports/A-Tale-of-Two-Cities-Hong-Kong-SAR-vs-Singapore