Across the Asia Pacific region, property markets started the year on a strong note, with office, industrial and logistics assets driving the ongoing recovery.
This report details prospects for the office and logistics/industrial sectors across the region in the light of likely recovery.
Colliers' experts also outline four of the key themes that Colliers expects to drive APAC property markets over 2021 – China Plus One strategy, technology occupiers, flexible workspace, and sustainability – and assess their implications for property occupiers and owners.
Key Forecasts & Outlook for Office Markets:
- We expect aggregate leasing demand to rise 96% from last year’s weak level, but see new supply at 1.6x demand, which should depress rents by 6.1%
- Rising vacancy should peak at about 15% at year-end 2023
- High vacancy will be concentrated in China and India; vacancy will be lower in popular occupier locations like Sydney, Melbourne and Singapore
- Most APAC office markets should favour tenants over the next year
- Offices remain popular with investors; however, with demand and supply out of balance in many cities, office prices are unlikely to rise in the near term
Key Forecasts & Outlook for Logistics & Industrial:
- The shift from physical to online retail has driven demand for logistics space, and COVID-19 has boosted e-commerce volumes
- Expansion in cold chain, new warehouse designs and new infrastructure projects should fuel demand further
- Most APAC markets now favour landlords
- Rents should pick up in the big Chinese cities in 2021, with 3.0% growth in Shanghai
- Higher incentives had made Sydney and Melbourne favour tenants, but with firm demand effective rents should rise 1.0-2.5% this year
- Cap rates for Chinese logistics assets could fall below office cap rates within a few years
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