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Asia Pacific Property Markets: Themes for 2021

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Logistics & Industrial sector and technology occupiers leading the way

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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Asia Pacific Property Markets: Themes for 2021

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Chris Dibble

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