Asia Pacific Commercial Property Markets Slowly Rebounding Post Covid

CBRE’s latest MarketView and Investment Trends research report a steady increase in commercial property leasing and capital markets activity in Asia Pacific in Q1 2021. The commencement of COVID-19 vaccination programs and an improving economic outlook have contributed to this economic rebound. However, recovery remains uneven across the region, with the momentum in each country largely correlated with the degree of success in containing COVID-19.

Office Sector Highlights

In the office sector, the report highlights higher tenant inquiries and more frequent site inspections, translated to stronger office leasing demand in Q1 2021. Regional Grade A rents decelerated from 1.2% q-o-q in  Q4 2020 to 0.7% q-o-q, bringing the y-o-y fall to 5.0%.

Retail Sector Highlights

In the retail sector, Asia Pacific retail rents fell by 0.4% y-o-y in Q1 2021, a slower rate of decline than the 2.1% y-o-y drop recorded in the previous quarter.

Retailers in most markets were more active in looking for new leasing opportunities, particularly in prime locations, backed by a steady improvement in retail sales and consumer confidence.

Industrial Sector Highlights

Industrial sentiment continued to pick up in Q1 2021, with global manufacturing Purchasing Manufacturers Indices (PMI) reaching 55 in March, a ten-year high. Warehousing demand remained upbeat, with Asia net absorption totaling 15.6 million sq. ft., the highest first-quarter total in recent years. Asia Pacific logistics rents rose by 0.7% q-o-q, the strongest rate of growth since the onset of the pandemic.

Asia Investment Trends

Asia Pacific commercial real estate investment volume totaled US$26 billion in Q1 2021, an increase of 12% y-o-y. Investment sentiment continued to strengthen over the quarter, with most markets observing an increase in inquiry levels.

READ full report here: Asia Pacific MarketView Q1 2021