Commercial Realty Investments Drop by 94 Percent from January to May in Asia Pacific​

Real estate activity has started to pick up in Asia Pacific (APAC). China, South Korea, Taiwan, and New Zealand are in the lead. 

According to the "Recovery from COVID-19" report by property consultant Knight Frank, commercial investment transactions, including big fund investments and high net worth individuals in commercial properties fell by 52% year-on-year or around $44.1 billion in value in Asia Pacific (APAC).

Commercial investment transactions dropped 94%, 88%, 83% year-on-year in India, Singapore, and Hong Kong respectively. 

The report also stated that commercial deals were postponed in Singapore, Tokyo, Jakarta, Delhi, Bengaluru, and Mumbai. 

“As more companies and occupiers look to release capital, they can direct investments back into their core businesses. We expect to see more sale and leaseback opportunities come to the market,” said Neil Brookes, the head of capital markets Asia Pacific at Knight Frank.

The report also noted that the market has started to pick up with China, South Korea, Taiwan, and New Zealand in the lead. 

According to a sentiment survey by Knight Frank involving brokers and researchers in 18 APAC markets, the industrial sector stays the most resilient. 

“All segments of real estate are impacted. Though at different paces for different segments, the sector will recover in tandem with the economic revival of the country,” said Shishir Baijal, chairman at Knight Frank India.

Large-scale expansion and relocations remain on hold for corporate occupiers. 

“Despite current circumstances, there is ample capital seeking medium to long-term real estate investment opportunities in Asia-Pacific, particularly in the core, safe-haven markets like Australia and Singapore. Accommodative monetary policies will ensure that the best-located assets with more robust tenant profiles will continue to be in demand,” said Brookes.

According to the report, leasing activity declined in half of the 18 markets in May, but industrial leasing activity has picked up significantly across the Asia Pacific region. 

References: The Economic Times, PropertyGuru

By: Yuulin An