Confidence in commercial real estate is on the increase across the Asia-Pacific area, with 2021 set to watch a 5% to 10% growth in investment, according to CBRE‘s latest Asia-Pacific Investor Intentions Survey.
The poll conducted late last year asked over 450 mainly Asia-Pacific based investors a variety of questions on their purchasing desire and favoured strategies, markets and sectors for 2021.
It was reflecting overall progress in market sentiment fostered in part by the recent commencement of vaccination programmes in several countries around the world with an upbeat fundraising environment that has witnessed US$59 billion of equity raised by Asia-Pacific-focused real estate funding between 2018 and 2020. The survey found that 60% of commercial real estate investors across the Asia-Pacific region intend to buy more real estate in 2021, the highest amount since 2016.
Institutional investors demonstrated tremendous confidence in the recovery, and logistics property was preferred for the first time since polls began, followed by offices. Data centres remained the most desired alternative asset category, followed by cold storage, the two sectors benefiting from structural shifts in the economy and the consequences of Covid-19.
Investors had an apparent preference for core, and opportunistic/distressed purchasing opportunities, and nearly 50% of investors had adopted ESG criteria in their investment efforts and strategies.
The recent commencement of vaccination programmes across the world, as well as a rise in availability caused by disposals by developers and property funds, led CBRE to forecast a 5% to 10% year-on-year rise in investment volume in 2021.
Investors believe that the pandemic will not have a detrimental impact on long-term office demand in the Asia Pacific region. It will lead to a stronger emphasis on environmental, social, and corporate governance (ESG) criteria in investment.
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Brent McGregor, executive chairman of CBRE NZ, said that Asia-Pacific investors had a greater interest in cross border prices.
“Ongoing travel restrictions are not discouraging Asia-Pacific investors from displaying a strong interest in cross border investment, with more than 70% of respondents intending to buy assets overseas in 2021,” he explained.
“With Asia comprising the pandemic relatively well in contrast to North America and Europe, more investors have recognized markets over the area as their preferred choice for investment this year.”
Therefore he said New Zealand was likely to continue to be an attractive destination for overseas investment.
Zoltan Moricz, senior manager of research for CBRE New Zealand, said, “Buying activity in New Zealand could receive a more significant boost than other parts of the world due to our success combating Covid-19 and the resultant resilience of our economic and social environment. This could shift some investors’ perception of New Zealand towards being a core global market and lead to investment volume growth in the order of 10+% in 2021.”