Confidence in commercial real estate is on the rise across the Asia-Pacific region, with 2021 set to see a forecast 5-10% rise in investment volumes, according to our latest Asia-Pacific Investor Intentions Survey.
The survey asked 492 mainly Asia-Pacific based investors a range of questions on their buying appetite and preferred strategies, sectors and markets for 2021. Some of the notable survey results include:
- 60% of investors intend to purchase more real estate in 2021. This is the highest level since 2016, suggesting strong buyer sentiment boosted by the $59 billion of dry powder investment funds that have been raised recently. The investors group where this is most manifest is from institutional investors such as pension funds, sovereign wealth funds and listed property entities. Intended selling activity is also up from last year with 34% of investors looking at disposing some assets. This indicates that 2021 should be an active market with less people sitting on the sidelines and more that are looking to either buy or sell.
- Investors have a clear preference for core and opportunistic/distressed buying opportunities. This is at the expense of less focus on Core plus and value add investments, indicating that buyer preferences are polarised either towards safe haven assets (Prime large-scale office and logistics) or picking up bargains.
- There is also a strong increase in demand for data centres and cold storage as property sectors benefitting from structural shifts in the economy and the impacts of Covid-19.
- Nearly 50% of investors have now adopted ESG criteria into their investment mandates and strategies.
- Ongoing travel restrictions are not discouraging Asia-Pacific investors from displaying strong interest in cross border investment, with more than 70% of respondents intending to purchase assets overseas in 2021. With Asia containing the pandemic relatively well compared to North America and Europe, more investors have identified markets within the region as their preferred choice for investment this year. Therefore, New Zealand, with its strong economy and success in containing Covid-19, is likely to be an attractive destination for overseas investment.
For more detailed information on the findings from the survey, download the report.