Hong Kong, 25 July 2019 – Colliers International (NASDAQ: CIGI; TSX: CIGI), a global leader in commercial real estate services, today released its Asia Market Snapshot Q2 2019 report. This multi-sector report examines the prior quarter’s property market performance in 15 Asian markets and provides forecasts for the quarter ahead.

Terence Tang, Managing Director of Capital Markets and Investment Services, Asia commented: “Across the region investors are taking stock after a politically eventful quarter, which saw everything from massive elections in India and Indonesia to protests in Hong Kong. However, there is ample evidence of resilience in markets like Singapore, where additional investment in the commercial and leisure sectors will underline the city-state’s status as a commercial haven; and China, where ongoing policy and infrastructure improvements in key markets including Shanghai and the Pearl River Delta should offset global volatility concerns.”

Logistics, office sectors stand out 
Continued growth in e-commerce and ongoing infrastructure improvements are set to fuel demand for logistics properties in multiple markets across the region. In Japan, the clear investment pick to watch over the next quarter is logistics in Tokyo, where total occupied logistics space is expected to expand at over 10% annually over the next five years. In the Seoul metropolitan area in Korea, increasing appetite among e-commerce firms for logistics centres is also expected to drive acquisition activity.

Commercial sector thrives in Singapore 
The commercial sector in Singapore will continue to draw investors and developers over the next quarter, as a government redevelopment scheme helps to unlock the investment potential of older buildings and revitalises central districts. Prime commercial properties led the investment sales market over the last quarter, with transactions topping SGD4.5 billion (USD$3.3 billion). Investors are also likely to be encouraged by the recent commitment of an additional SGD9 billion of investment in the city’s two integrated resorts, which will have positive knock-on effects on growth and employment.

Japan powers on 
Investment momentum in Japan remains robust despite the looming threat of a consumption tax increase in the final quarter of 2019. Both institutional and private investors from overseas remain attracted to the market’s region-leading yield spread, and buoyant occupier demand and strong rental growth are supporting the stability of the investment market. Investors also remain keen to explore opportunities in the Tokyo residential sector.

Policy changes drive demand in China
Recent government announcements have the potential to impact dynamics in China’s major real estate markets. In Beijing, the State Council has approved a plan to boost development of the rental apartment market by permitting the conversion of commercial properties into residential rental units. This could increase the focus of investors on the sector, and foreign investors in particular are expected to become more active in the market over the next quarter. Meanwhile in Shanghai, senior officials have unveiled a plan for the integration of the Yangtze River Delta and announced tax and fee reductions that should ease the cost burden for businesses. These moves are likely to drive demand for commercial and office properties.

Residential rebounds in Hong Kong, office submarkets showing strength
Over the first four months of 2019, investment confidence was on display in both the office and residential sectors. Office unit prices were firm in the main commercial districts between Sheung Wan and Wan Chai on Hong Kong Island, and in the residential market prices picked up at their fastest pace in six years, rebounding almost 9% between January and April after falling a similar amount in late 2018. However, we expect that a combination of concerns about US-China trade tensions and the protests in Hong Kong in June will weigh on sentiment in the office market, while residential transaction volumes were significantly lower in June than in April and May. 

Download Asia Market Snapshot Q2 2019 report.
 

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For further information, please contact:
 
Michelle Shao
Asia Marketing Communications 
Colliers International 
Phone: (852) 2822 0541
 
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.