A stronger office market, alternative sectors, and demand for modern logistics facilities will drive investment
According to JLL, Asia Pacific’s commercial property market is expected to stabilise further next year due to an acceleration in investment and leasing activities.
In 2022, JLL says investment volumes will be around USD200 billion or more than 15 percent of the full-year estimate for 2021 (currently at USD162-169 billion).
Factors that will drive investment activity and leasing recovery include a stronger office market, continued growth of alternative sectors such as data centres and life sciences, as well as high demand for modern logistics facilities.
Anthony Couse, chief executive officer at JLL Asia Pacific, says, “Asia Pacific’s real estate markets will enter 2022 stronger than a year earlier, as investors maintain their bullishness and leasing activity continues to further recover.”
“It’s clear that the path to economic recovery is not a straight one, but we’re hearing from our clients that they have confidence in the future of office-based work. Investor sentiment is positive though uncertainty remains the reality and will be factored into any decision-making in the year ahead.”
Moreover, JLL predicts the volume of capital targeting real estate will remain steady throughout 2022, with China and Japan receiving more funds for opportunistic investments.
Asia Pacific’s office market will add 6.9 million square metres in supply, a 13 percent increase from this year and net absorption levels will also rise by 20 percent next year.
Prime logistics stock is anticipated to increase by 17 percent between 2021 and 2022, resulting in the belief that logistics investment will rise to USD60 billion annually by 2025.
Additionally, as confidence in the hospitality sector grows, hotel investments are also forecasted to jump by up to 30 percent in 2022, crossing the USD9 billion threshold next year.
“The real estate market in Asia Pacific has faced unprecedented challenges in 2021. While 2022 will come with some risks, investors with a long-term view remain confident in the secular trends that will drive demand in this region: ongoing urbanization; increasing prosperity and a growing middle class; and the acceleration of e-commerce. All of these point to opportunities for investors,” says Roddy Allan, chief research officer at JLL Asia Pacific.
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