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With 2019 being an average year in terms of new office supply, amid the intense competition for space, Grade A office vacancy in the C5W was close to nil. Meanwhile, underpinned by solid corporate profit growth – particularly in the technology sector – rents continued their upswing. Specifically, by year end, average Grade A rents in the C5W had reached JPY37,373 per tsubo per month – an increase of 8.0% year-on-year (YoY). Indeed, fundamentals appeared solid heading into the new decade, only for the COVID-19 outbreak to scupper the sector’s previously optimistic prospects.

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• Asia Pacific REITs outperformed the broader market in May against a backdrop of falling number of new COVID-19 cases and phased re-openings of the region’s economies.  There continues to be a wide array of fiscal policy responses across the region including further subsidies to sectors most strongly impacted by social distancing policies and travel restrictions, as well as to small and medium-size enterprises (SMEs).
• By sector, industrial remained the top performer, posting double-digit gains in May. By country, Australian real estate equities outperformed on the back of strong returns generated by the residential and industrial sectors. 
• Japan REITs led the region’s in May, mainly driven by the hotel and retail sectors. Japan's lower house of parliament approved an emergency budget that include rent subsidies for SMEs and thus bode well for the office sector. Singapore REITs were also an outperformer, buoyed by a solid performance of the industrial and retail REITs.

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Against the backdrop of a slowing domestic economy, coupled with global economic uncertainties and the protracted China–US trade war, the hotel industry in the Greater China region demonstrated weak performance in 2019. Among all major cities, including Beijing, Shanghai, Shenzhen, and Hong Kong, the Average Daily Rate (ADR) of five-star hotels shrank, and the occupancy rate dropped in Shanghai, Shenzhen and Hong Kong. Macau still managed a slight increase in ADR, but the occupancy rate fell. The weak growth trajectory of the hotel industry was further dragged down by the COVID-19 outbreak and this is expected to continue in the first half of 2020. 

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•  Australian real estate equities and REITs led the region, as retail rebounded and industrial sector remained strong.  Additionally, investor sentiment has improved with the further easing of COVID-19 restrictions throughout Australia.
• Singapore REITs also outperformed on the back of a rebound in hotel REITs and continued resilience in the industrial sector.  Furthermore, the rally comes on the heels of the Singapore government’s announcement of a series of new measures to provide S-REITs with greater flexibility to manage their cash flows and raise funds.
• China offshore REITs also performed well in April as domestic activity continued to gradually pick up.  Notably, China launched a pilot scheme for REITs in the infrastructure sector on April 30, focusing on warehousing and logistics, toll roads and other transportation facilities, etc. as well as new infrastructure, national strategic emerging industrial clusters, high-tech industrial parks, and other thematic industrial parks.

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