Commercial office, industrial and logistics property markets across the Asia Pacific region performed well in the first quarter of 2021 setting the stage for a sustained recovery in coming months, according to the latest Asia Pacific Market Snapshot report released from Colliers.
Commenting on the report’s results, Richard Kirke, International Director with Colliers’ Capital Markets notes there is a growing view amongst investors that the worst of the market disruption caused by COVID-19 has now passed.
“Investor confidence continues to improve across the Asia Pacific region, and we are experiencing heightened deal volumes that will renew enthusiasm for the sector from the lows of 2020.
“It way a very busy first quarter in China, from both local and offshore investors, with Beijing recording more sales in the quarter than for all of 2020 combined.
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“A resurgence in Hong Kong, Singapore and a completion of a number of office and major residential transactions in Japan provided further evidence that 2021 is set to be a year of higher transaction volumes,” says Kirke.
And closer to home, the report also noted that even though the first quarter is typically quieter than others, heightened activity in Australia and New Zealand - due to a combination of factors such as workers returning to their offices, the rollout of vaccines, low interest rates, and international borders reopening - were all positives.
Chris Dibble, Colliers’ National Director of Partnerships, Research and Communications notes that locally, the situation continues to be well managed.
“With the global vaccine rollout gathering momentum, there is increased optimism and anticipation of a return to relatively normal market conditions.
“Investors appreciate the short-term disruption of the situation and are turning their attention to longer-term fundamentals, including demand and supply imbalances and low interest rates.
“Demand has been bolstered for safe haven assets; flagship office assets, industrial and bulk retail properties, with the latter two asset classes continuing to experience strong tenant demand.
“Recent industrial vacancy surveys show market conditions have remained extremely tight, bolstering the view that vacancy is at, or close to, its cyclical peak.
Confidence in the office sector is recovering, buoyed by improving demand and supply dynamics with confirmed tenant demand for space within new projects underpinning development activity.
“While sub-lease office space remains available, more so for Auckland than in Wellington, plans for returning to office premises, expansion plans and new business growth are all pointing in the right direction for greater levels of demand ahead,” says Dibble.
Terence Tang, Managing Director, Capital Markets & Investment Services for Asia notes the region’s property markets are off to a strong start having capitalised on the momentum from the previous quarter.
“We expect the industrial segment will continue to do well by riding the e-commerce wave while office assets will receive a boost from people returning to work in growing numbers.
“Overall, the coming months will see the recovery strengthen thanks to easy liquidity and market-friendly government initiatives coupled with the roll-out of vaccines and expectations of borders eventually reopening.”
