In 2016, the demand for occupiers and investors across the Asia Pacific region is increasing, following on from an improvement in the balance between the two in 2015.
Additionally, the increase in real estate transactions that is already prevalent in 2016 is likely to continue due to strong demand for investment.
Asia Pacific Summary
The most significant theme of 2016 has been the rise in real estate transactions across the region. This effect is a result of high demand and an increased supply, partly due to the planned developments in Asian cities.
There is increased capital throughout the region that will be utilized by investors who aim to raise their asset allocations in Asia.
It is expected that the current prospering markets will remain healthy throughout 2017, however investors may be subject to an increase in interest rates in the United States, especially after the presidential elections.
Australian offshore investments have more than doubled in 2015. It is expected this growth will continue in 2017. However the types of investors will be different from the previous cycle in 2007 when it was dominated by Australian institutions. In the current cycle, these institutions are increasingly being funded by offshore groups.
Financial Markets
Capital markets are recovering and investors are confidently investing in real estate due to sustained economic growth across Asia Pacific.
Risk of liquidity is lower due to cooling measures being relaxed across the region as the year progresses and further supply reaches the market.
Industrial Markets and Logistics
Demand for warehouse space is on the rise, resulting in good prospects for industrial investors.
Aside from market development, the property industry may also be affected across all sectors by structural variation and technology, which may cause changes to logistical efficiency and online retailing.
Office Locations
As the global economy recovers, the demand for office real estate in Asia Pacific is rising. These trends may be indicative that the office market will continue to thrive as the economy further improves.
Retail Properties
Most malls remain empty or not up to optimum occupancy.
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