APAC property investment volumes to post double-digit growth until 2023

Singapore is one of the most promising growth markets in the region.

Asia Pacific real estate transactions recorded a 10% drop in 2020, but there was a hint of recovery the following year as investment volume exceeded pre-Covid levels in 2021. 

According to a recent report by Cushman & Wakefield, this momentum will be maintained with both 2022 and 2023 expected to record double-digit volume growth as the economic recovery invigorates the occupier sector. 

Here’s more from Cushman & Wakefield:

Availability of stock is a potential headwind facing investors but with interest rate increases expected to be gradual, this should maintain investor confidence. 

“Asia Pacific enters 2022 with strong underlying momentum but greater than expected short-term headwinds from the spread of Omicron and rising geopolitical risk. However, the momentum will assert itself in Q2, building upon the region’s re-emergence from prolonged lockdowns,” said Dr. Dominic Brown, Head of Insight & Analysis, Asia Pacific at Cushman & Wakefield. 

“The regional economy will regain the top spot in terms of the pace of economic growth in the second half of 2022, extending into 2023. Occupier markets are therefore forecast to strengthen in the year ahead, with demand more widely spread across the region.” 

Singapore ranks well among other markets in terms of growth prospects, with 2022 real GDP growth at 4.59%. Uncontrolled inflation may impact economic growth and the inflation threat seems relatively benign compared to other key markets, with 2022 unemployment rates and consumer price inflation expected to come in close to long term average. 

“Core opportunities in Singapore include urban logistics and CBD Grade A offices given their limited supply and strong demand for such assets. Rising inflation and covid uncertainties would increase construction costs and supply would remain tight over the short to midterm. For investors with higher risk appetite, they can look at value-add opportunities in ageing CBD offices and well-located industrial properties, with a view to brush up their ESG credentials and cater to the current flight to quality,” said Shaun Poh, Executive Director and Head of Capital Markets at Cushman & Wakefield. 

“Opportunistic deals may be found in the Singapore hospitality market, given the gradual re-opening of borders, an anticipated rebound of international visitors and return of key events such as the F1 night race.”

Get the full report here.