UBS has recently released the third edition of their Real Estate Outlook report for 2021, taking a deep-dive at the prevailing trends across Asia-Pacific commercial property markets with a number of interesting findings highlighted below.
> Recovery in the global real estate sector continues to gather pace though new evolutions of Covid-19, specifically the Delta strain continue to present risks
> Resilience in global commercial property markets have led to strong returns for investors thus far in 2021, particularly in the industrial & logistics sectors
> Global investment volumes have re-bounded strongly, sitting just 3% below where they were in the third quarter of 2019
> APAC office markets are continuing to record relatively weak performance for the prior quarter, a function of ongoing turmoil and lockdowns across the region
> "There is still significant headroom for e-commerce penetration in APAC, which is not supportive of retail. However, the prospects for retailing lie in the two extreme ends of the spectrum, namely essential retail and prime retail"
> "Every other retail format in the middle of the spectrum has and will be disrupted by the growth in online share of spending"
> Prime retail is likely to improve with the lessening of restrictions, leading to an opportunity for astute investors to identify assets that have experienced significant re-pricing and implement a highly-focused value-add strategy
> Total commercial real estate transaction volumes across APAC were $66.7b USD for H12021, an increase of 14.9 YoY
> "Lastly, we are seeing a cut-back in the supply of industrial land across APAC, and that has really pushed up the rents and capital values of logistics assets, especially the well-located ones. Japan, South Korea, China, and Australia are the few markets that will see better availability of modern logistics assets".
> The report forecasts that investment will likely be cantered across these markets over the mid-term
