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Real estate remains a key asset class within investors’ diversified strategies even as the turmoil in global financial markets and the instability across the capital spectrum continue to cause concerns.

That’s backed by some solid fundamentals, particularly in Asia Pacific. One, the region’s market resilience, versus its European and the US counterparts, put niche assets here on top of investors’ radar, and now, the reopening of China comes in as a shot in the arm. Two, the flight to quality - led by climate actions and return to office initiatives, has fuelled tight occupancy and rental growth across key Asia Pacific markets. Three, alternatives powered by the region’s living, logistics and life sciences sectors are luring investors with new opportunities and robust growth potential. There are several other reasons.

The moot point is the impact of rising interest rates on valuations and cap rates across key Asia Pacific markets appears mitigated, as rental growth remains powered by strong demand on the back of tight vacancy. However, it's vital today for real estate investors to proactively map the next 12 months and ensure a winning action plan to make the most out emerging opportunities in the year ahead.

Read more to find out the 2023 APAC action plan in a smart investor's diary

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This report examines the investment capital flows to and from the Asia Pacific region in 2022, and highlights the key markets and sectors that saw notable inflows and outflows.

Key highlights include:

  • India was the only market in Asia Pacific to attract more international capital in 2022 compared to the previous year.
  • While Singapore remains the biggest source of capital in Asia Pacific, investment halved from 2021.
  • Western investment in mainland China fell to just US$500 million in 2022.
  • Interest and exchange rate volatility has eroded Asia Pacific investors’ appetite for U.S. real estate.
  • U.S. investment in Asia Pacific slowed significantly due to sharp interest rate hikes in H2 2022.

This report was originally published in https://www.cbre.com/insights/reports/2022-asia-pacific-real-estate-capital-flows

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The Hong Kong Trade Development Council (HKTDC) and Link Asset Management Limited (Link) released a survey study, “Hong Kong Green Capabilities in Real Estate Development and Property Management: RCEP Opportunities”, which highlights seven distinct advantages of Hong Kong in the field of green buildings.

The report also underscores green building challenges across the Regional Comprehensive Economic Partnership (RCEP) countries, with which Hong Kong can strengthen collaboration in four major areas to expand Hong Kong’s and regional green building capacities to create a greener and sustainable future: climate risk assessment and design consulting; green financing; construction and facility management digitalisation; and green material certification and sourcing.

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  • Inbound investment in Singapore in 2022 reached US$7.585 bn, a marginal increase (3.4% y-o-y) from US$7.333 bn recorded in 2021.
  • APAC was the largest source of capital, accounting for 72% of real estate investment into Singapore in 2022.
  • Singapore’s outbound investment in 2022 reached US$28.284 bn, normalising from the record high of US$47.709 bn in 2021. Despite the drop, Singapore remained the top APAC outbound investor.
  • 2022 outbound investment volumes were driven primarily by higher investment in the U.K., which saw a 120% y-o-y increase.

This report was originally published in https://www.cbre.com.sg/insights/viewpoints/singapore-viewpoint-investment-in-out-2022

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With the Asia Pacific commercial real estate market witnessing rapid increases in financing costs, attention is turning to the sizable volume of outstanding senior loans due to mature, which could lead to a funding gap in the next few years.

CBRE estimates that there is currently US$177 billion of outstanding senior commercial real estate debt in Asia Pacific, with a debt funding gap of US$5.8 billion set to emerge in the region between 2023 and 2025.

This Viewpoint looks at the factors underpinning the debt funding gap in Asia Pacific over the next few years, including the markets and sectors that are likely to face the biggest gap, as well as the implications for investors, borrowers and lenders.

This report was originally published in https://www.cbre.com/insights/viewpoints/Asia-Pacific-Viewpoint-Bird-s-Eye-View-on-Asia-Pacific-Commercial-Real-Estate-Debt-Market

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