Asia Pacific’s property market bounces back in third quarter of 2020, records up to 35% increase

Financing in Thailand is predicted to surge within the upcoming year, according to JLL

Bangkok cityscape in Phra Ram 9 street where the modern building G Tower stands. somdul/Shutterstock

Between July and September of 2020, USD35 billion were directly invested into Asia Pacific’s real estate, indicating recoup after the COVID-19 contraction. According to JLL, despite the 19 percent drop in third quarter numbers compared to other years, there was still a 35 percent quarter-on-quarter recovery. Investor confidence has soared the highest since the beginning of 2020, increasing capital spending across Asia Pacific’s prime markets.

In the third quarter of 2020, the wider industrial market, particularly in logistics and data centre, has responded strongly. Institutional investment managers have also increased, compared to the start of 2020, which consisted mostly of private investors. Cost of capital has also severely dropped, encouraging buyers and investment managers to return.

China, Japan, and South Korea have steered the investment recovery, as their markets have reopened, stimulating economic movement and growth. Hongkong and Australia’s transactional activities remain subtle, including Thailand, as international capitalists are restrained from travelling and locals activate a “wait-and-see mode”.

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Head of Transaction Businesses in JLL Thailand, Michael Glancy says, “As property developers and owners are changing their portfolio strategy, new investment opportunities are emerging. As an example, there is an increasing number of office developments to invest in, including ageing assets, some under construction and off-plan.”

“Some developers have cancelled their proposed development plans and are selling land plots. Due to pent-up investor demand and an increasing amount of stock, we believe there will be increasing transaction activity over the next 12 months in Thailand.”

A substantial number of investors have returned back to the real estate market, confirming the desirability of Asia Pacific’s properties and assets. Experts are optimistic that various opportunities will emerge in the fourth quarter of 2020 across the region.