The greater share of global real estate investment in the emerging cities of Asia-Pacific!

There are multiple parameters that help you in identifying the trends that shape up a regional property market. Investors as well as buyers have a strong appetite for opportunities outside the gateway of their home with attractive pricing. The real estate buyers and investors are now looking outside conventional asset classes. The realtors’ on the same hand are taking complete advantage of the new demand resulting from changes in consumer behavior. In fact the global real estate companies are becoming more cautious towards investment opportunities they present and their expansion that they execute strategies that focus on improving their operational efficiency. Interestingly Asia Pacific cities are emerging as one of the fastest growing real estate markets in the world. The intensity of investment in these markets is growing every day. The commercial real estate investment statistics reveal that Sydney, Melbourne, Hong Kong and Tokyo are emerging top cities in Asia Pacific while Bangalore, Ho Chi Minh City and Shanghai are growing immensely attracting investment almost proportionate to their GDP. 

Real Estate Market Outlook for Asia Pacific:

More supply, but limited choice: While Asia Pacific occupiers remain very selective, strong preference remains for primary real estate in core locations. The buyers definitely have a focus on portfolio optimization, so they majorly prefer high quality properties.

Low rental yield: The rental growth is expected to remain weak in most of the markets. There have to be more opportunities for asset conversion. The yields continue to fall, although at a slower rate.

Real Estate investors: Asia Pacific has a huge investment potential and these emerging world cities will require to boost transparency, improve regulatory oversight, and build robust financial platforms to attract real estate investors in the long-term.

Embracing shared economy: Very much similar to the markets in the West, Asia is also embracing the shared economy. Asia Pacific has seen a huge growth in the adoption of shared workspaces. A lot of large companies are embracing this collaborative working environment, and shared spaces are becoming a very prominent concept in these cities.

Tokyo, Hong Kong, Singapore, Sydney, Shanghai, Melbourne, Seoul, Osaka, Brisbane, Chongqing, Beijing, Nanjing, Mumbai, Perth, Taipei, Manila, Fukuoka, Kyushu, Kuala Lumpur, and Shenzhen were among the most active Asia Pacific commercial real estate markets. Real estate buyers are now looking at portfolio diversification rather than just a real estate investment. As per the industry statistics, around 55-60 per cent of the global office development is in the pipeline by the 2020 and a lot of it is projected to come from these emerging markets. So looks like a huge bucket of opportunities over here!

Talking about India, while Mumbai, Delhi and Bangalore come under the emerging cities of the world, we are yet not witnessing very attractive direct commercial real estate investment volumes. Low market transparency is one of the major reason that is holding back direct investment. India overall is usually rated as a low to semi-transparent markets in the global Real Estate transparency index.

Top preferred location in different property types:

Industrial: Chinese markets feature prominently. Shenzhen in particular is ranked top  on the basis that the ongoing infrastructure construction improvement. With enhanced transport operations and facilities development, Beijing also falls in the same category.

Residential: Among various destinations, India, Vietnam, and Indonesia come under curious choices, as these are also among the destinations that have oversupply issues.

Office space: Manila, Mumbai, Jakarta, Bangalore, Shanghai top the list due to major demand for International office spaces such as BPO’s, outsourced customer service, back offices, and IT support.

Hotels: India grabs a top place in this list as the Indian hotels have potential for substantial investment. Vietnam on the same hand has a good investment appetite followed by Singapore and Japan.

Thus, for the last several years, real estate markets across the Asia Pacific have been shaped by a number of external forces. They are still continuing to drive capital toward particular types of asset classes and geographies. While ongoing structural changes and modern logistics facilities continue to boost end-user demand throughout the Asia Pacific region, it perhaps is one of the most favored of all asset classes regionally.