Emerging Trends In Real Estate – Asia Pacific 2017 Report


Emerging Trends In Real Estate – Asia Pacific 2017 Report

Transaction volumes, yields and the shared economy - what's trending in Asia-Pacific's real estate industry?

Published on 20 March 2017

Jointly undertaken by PwC and the Urban Land Institute, the Emerging Trends in Real Estate – Asia Pacific 2017 report provides an outlook on real estate investment trends, metropolitan areas and other real estate issues throughout the Asia-Pacific region.

The main takeaways from this report include the following:

  • Low transaction volumes in the first six months of 2016 reflect a shortage of available assets in major markets – particularly Tokyo – as owners opt instead to refinance properties at lower rates instead of selling them.
  • Yields continue to fall, although at a slower rate. Looking forward, while most investors see potential for further compression – mainly as a result of new capital being pointed at the sector – the trend may be reaching its limit, especially given weak rental growth prospects in most regional markets (except Australia).
  • Metropolitan areas have increased in popularity – given ongoing trends of urbanisation, land shortages in city centres and low returns from central business district projects. Cities across the Asia-Pacific region including Sydney, Shanghai, Mumbai and Jakarta are engaged in major transportation construction projects that link suburbs or satellite towns to city centres.
Projected office sector rental growth Deutsche Asset Management

*Source: Deutsche Asset Management, August 2016

In line with markets in the west, Asia is embracing the shared economy. The last 12 months have seen huge growth in the adoption of shared workspaces as large companies scrap conventional office layouts and embrace hot-desking and collaborative working environments.

This year’s survey shows a strong shift away from last year’s favourites – which featured core markets in Japan and Australia – in favour of emerging-market destinations including India, Vietnam and the Philippines.

Other major survey findings include steep declines in the popularity of gateway cities (except Shanghai). In particular, Singapore – an investor favourite just a few years ago – has declined in rankings as it struggles with overcapacity, falling demand and a slump in its residential sector.

To learn more, download the report here

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