Asia Pacific commercial real estate investment to rise by five per cent in 2019, says JLL

Urbanisation and demographics continue to create opportunities for commercial real estate investment amid late-cycle environment.

Asia Pacific’s overall real estate transaction volumes in 2019 are expected to rise by five per cent, though the pace of growth momentum will slow down, says global real estate consultant JLL.

“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 U.S. and China, as well as strains in the EU caused by Brexit negotiations,” says Mr Stuart Crow, Head of Capital Markets, JLL Asia Pacific.

“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.”

In Asia Pacific, real estate demand will continue to be driven by its strong demographic fundamentals. The region’s urban population is expected to exceed 400 million people by 2027, while the population aged 65 and above will rise by 146 million people within the next 10 years. By 2021, Asia Pacific’s e-commerce market is projected to grow to US$1.6 trillion.

Dr Megan Walters, Head of Asia Pacific Research, JLL, says: “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.”

https://www.icompareloan.com/resources/real-estate-investors-2/

According to JLL, there are the five key trends that will shape the industry and drive interest in the commercial real estate investment in Asia Pacific in 2019.

1. Growth in ‘living’ assets
   The region’s increasing urban population has seen a growing demand for alternative residential arrangements, including student accommodation, co-living, multi-family, nursing homes and aged care.For anyone keen on commercial real estate investment, these living sectors offer attractive yields and long-term growth prospects as well as an opportunity for portfolio diversification. “These new sectors are set to outperform traditional residential assets given their efficient use of space, superior building management, and generally higher entry yields,” explains Mr Crow. “Aged care, for instance, offers returns of 11 to 14 per cent in Tokyo, and 8 to 12 per cent in Singapore.”
2. Building flexible spaces to attract talent
   Businesses are increasingly using shared workspaces as a way to foster innovation among employees and win the war for talent. This renewed focus on building human experiences has led to an uptick in flexible offices – including coworking and serviced offices – across the region.Dr Walters says: “By 2030, flexible work spaces could comprise 30 per cent of some corporate commercial property portfolios worldwide. This means that market consolidation will become more common – landlords and developers will start to create their own flexible space offerings, form joint ventures with coworking providers, or look at mergers and acquisitions among coworking brands.”
3. Rise of logistics and data centres
   With Asia Pacific leading global e-commerce adoption, there is rising pressure for organisations to establish their data storage infrastructure as well as warehousing facilities for physical retail goods.Mr Crow says: “The robust rate of consumption is driving increasing investor interest into data centres and logistics in Asia Pacific. These sectors will continue to expand, with significant capital targeting emerging markets like China, India and Indonesia. Meanwhile, logistics hubs in major cities are growing. As an example, the logistics market in Sydney increased seven-fold between 2015 and 2017.”
4. Shift towards debt exposure
   With banks tightening their lending criteria, this leaves a gap for non-bank and offshore lenders to enter the market, particularly in Australia, India and China, according to Mr Crow. As a result, there is a spike in investors turning to global offshore lenders who provide flexible forms of either debt or equity on selected projects.Likewise, institutional investors are also expanding their footprint into real estate debt. Mr Crow adds: “Debt investment is one way to curb risk in a portfolio and investors are increasingly looking at ways to use debt to shield them from market volatility and falling property incomes.”
5. Evolution of smart cities
   With smart city initiatives pushing ahead in Singapore, Japan, South Korea and Australia, Asia Pacific has seen an increasing need to build better digital infrastructures to maximise efficiency, sustainability and improve the living conditions for inhabitants.Dr Walters explains: “Proptech – the convergence of real estate and technology – plays a key role in the future development of cities. As smart cities are highly data-driven, smart property development and management enable extensive data collection and analytics – both of which are crucial for cities to create more livable environments for their growing populations.”

How to Secure a Commercial Loan Quickly

https://www.icompareloan.com/resources/urgent-personal-loan/

Are you planning on a commercial real estate investment but unsure of funding? Don’t worry because iCompareLoan mortgage brokers can set you up on a path that can get you a commercial loan in a quick and seamless manner.

Alternatively you can read more about the Best Commercial Loans in Singapore before deciding on your purchase.  Our brokers have close links with the best lenders in town and can help you compare Singapore commercial loans and settle for a package that best suits your commercial purchase needs. Our services are also very personalised and tailored to the unique needs of the buyers.

Whether you are looking for a commercial real estate investment loan or to refinance and existing one, our brokers can help you get everything right from calculating mortgage repayments, comparing interest rates, all through to securing the final loan. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us for your next purchase.

If you need advice on a new commercial loan  or Personal Finance advice.

If you want to speak to our trusted Panel of Property agents.

If you need refinancing advice.