Asia Pacific commercial real estate investment will increase by 5 percent
Asia Pacific commercial real estate investments will increase by 5 percent. According to JLL, Asia Pacific commercial real estate investments in 2019 will increase by five percent. What is the future of Asia Pacific commercial real estate investments? What do experts say about Asia Pacific commercial real estate investments?
Despite the commercial war between China and the US, Asian Pacific commercial real estate investments are gaining value.
Stuart Crow, Head of Capital Markets, JLL Asia Pacific said“A decade into the economic cycle, investors are contending with macro risks and geopolitical uncertainty such as rising interest rates, continued trade tensions between the US and China, as well as strains in the EU caused by Brexit negotiations.”
He added: “Against this backdrop, real estate continues to look attractive as a safe haven for investments, with its portfolio diversification benefits and relatively higher returns compared to other asset classes. However, in this late-cycle environment, investors are becoming more selective and disciplined in exiting investments because it’s getting harder to find income-producing alternatives.”
According to experts, despite the economic negativities, investors see the region profitable. Dr Megan Walters, Head of JLL’s Asia Pacific Research unit, explained, “Despite the macro concerns, we believe that this region’s opportunities will mitigate the risks, spurring investors and occupiers to look into sectors that have defensive qualities or those that run on less cyclical demand drivers.”
Strong real estate demand in Asia Pacific is due to robust demographics. The population of the Asia Pacific region is expected to be 400 million by 2027. 65 or more over the next 10 years will reach 146 million people. In 2021, Asia Pacific e-commerce market is expected to reach $ 1.6 trillion.
Due to the increasing population in the region, the demand for student accommodation centers, retirement homes and alternative residences will increase. Long-term growth prospects will direct investors to the region.
“These new sectors are set to outperform traditional residential assets given their efficient use of space, superior building management, and generally higher entry yields,” explained Mr Crow. “Aged care, for instance, offers returns of 11-14% in Tokyo, and 8-12% in Singapore.”
Sevdenur Demir / [email protected]