Global real estate market to stabilise mid-2023; Asia Pacific most optimistic about economic growth

The top three segments preferred by Asia Pacific investors for 2023 are offices, industrial and logistics, and multifamily/build-to-rent

Colliers’ 2023 Global Investor Outlook report revealed that the global real estate market will stabilise by mid-2023.

It also emphasised that the Asia Pacific region is the most optimistic about economic growth, as 53 percent of APAC investors foresee a positive impact made by an expansion within their own region. Meanwhile, 43 percent of APAC respondents believe a positive impact will come out of a global economic expansion.

Piyush Gupta, Managing Director, Capital Markets and Investment Services, Colliers India, says that emerging economies in APAC markets such as India are now seeing “more depth in Real Estate Investments with a wider base of Investors, the strong performance of Equity Capital Markets including REITs, listed equities, and capital inflows across the value chain of Development of Office and Residential Development.”

The top three segments preferred by Asia Pacific investors for 2023 are offices (68 percent), industrial and logistics (65 percent), and multifamily/build-to-rent (42 percent). Seventy-four percent of investors also favour core assets in established, larger cities, but multifamily and senior housing are gaining traction in smaller, growing cities. 

More: Onshore data centres become more prevalent in the Asia Pacific region

Additionally, 52 percent of Asia Pacific respondents intend to invest in suburban malls (the highest globally), while 48 percent intend to invest in CBD/high street retail.

According to Fund Selector Asia, the following three trends will help drive the region’s investment strategy in the upcoming years:

First, digitalisation, especially with demand rising in the logistics and hyperscale data centre sectors. Second, demographics, wherein the young population drives demand for rental housing while the growing aging population boosts demand for senior housing. Lastly, decarbonisation, wherein more businesses are working towards greener buildings, driving the demand for properties with better ESG credentials.

There has been a rapid recovery from major downturns in the region. It is expected that valuation declines will continue into next year, but some sectors and markets may experience a brighter outlook.

The Property Report editors wrote this article. For more information, email: [email protected].