Amidst A Low Interest Rate Environment, Asian Property Market Activity Mostly Buoyant As Investors Maintain Interest In Office/Commercial Assets

Asian property market experiences mixed impact of geopolitical tensions amid persistent low interest rates and e-commerce expansion

•  Asian property market experiences mixed impact of geopolitical tensions amid persistent low interest rates and e-commerce expansion
• Tokyo remains Asia’s top investment market for office assets
• China’s markets in recovery mode in Q4 with significant transaction growth recorded in Shanghai and Beijing
• Ongoing citywide protests and US-China trade war worries drag down commercial asset transactions in Hong Kong
Singapore, 30 January 2020 – Geopolitical concerns continued to cast a shadow on Asia in the final quarter of 2019, but investor activity in the region’s property markets remained largely resilient, according to the Asia Market Snapshot Q4 2019 report by leading global commercial real estate services and investment management firm, Colliers International (NASDAQ: CIGI; TSX: CIGI).
The leading global real estate services and investment management company today released its multi-sector report, which examines the previous quarter’s property market performance in 15 Asian markets and provides forecasts for the current quarter.

 

Terence Tang, Managing Director of Capital Markets Asia said: “Overall, despite the uncertainty of the past year, cautious optimism now prevails for a number of reasons, such as the easing of trade tensions, continuing low interest rates across markets, and the long-term growth prospects of key Asian markets underpinned by strong fundamentals.”

 

Sub-markets in Chinese cities starting to shine
China saw a revival despite tight liquidity conditions and the absence of fresh government measures in the fourth quarter. In Shanghai and Beijing, transactions involving a range of sub-markets in the cities’ outskirts dominated. In the country’s south, the search for lower-cost, higher-yield options fed a growing interest for commercial properties, including offices and industrial parks, in Guangzhou and Shenzhen. 

 

Tokyo’s office sector leads the charge
Despite the lingering effects of the trade dispute with South Korea and the US-China trade war, Tokyo stands out as Asia’s top investment market. Office assets in the capital city remained the top pick thanks to falling vacancy rates and rising rents. The prime retail and hotel segments also recorded a solid performance, aided by tourist arrivals. In 2020 and beyond, smaller residential units could garner attention in the Greater Tokyo area.

E-commerce sector boosts South Korea

Low interest rates and ample liquidity helped drive deals in South Korea’s property market, where total transaction volumes for the year (USD9.6 billion) nearly matched 2018 levels. Investor activity was concentrated in prime office assets and the logistics segment as a thriving e-commerce sector contributed to healthy demand. 

 

Lion City hotel sector powers ahead
Singapore registered a handful of significant transactions across the industrial, office and hotel segments while the residential market was subdued. The hotel sector, in particular, continued to pull in investors given the city-state’s appeal to leisure travellers and the MICE (meetings, incentives, conferences and exhibitions) industry. The outlook remains positive going into 2020, aided by favourable interest rates and capital allocation trends. 

 

Appreciating Hong Kong’s long-term value
The combination of widespread social unrest and the fallout from the US-China trade conflict spurred a slowdown in Hong Kong’s real estate transactions. But although these issues have dampened rental and capital value growth, the city’s status as the region’s preeminent business hub means investors willing to take the near-term risk and adopt a value-add strategy can benefit when the market eventually bounces back.

 

Download Asia Market Snapshot Q4 2019 report.
 
 

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For further information, please contact:

Cassius Taylor-Smith
Asia Marketing Communications 
Colliers International 
Phone: +65 6531 8667
Email: cassius.ts@colliers.com

About Colliers International

Colliers International (NASDAQ, TSX: CIGI) is a leading global real estate services and investment management company. With operations in 68 countries, our 14,000 enterprising people work collaboratively to provide expert advice and services to maximize the value of property for real estate occupiers, owners and investors. For more than 20 years, our experienced leadership team, owning approximately 40% of our equity, have delivered industry-leading investment returns for shareholders. In 2018, corporate revenues were $2.8 billion ($3.3 billion including affiliates), with more than $26 billion of assets under management. Learn more about how we accelerate success at corporate.colliers.com, Colliers.com or follow us on LinkedIn.