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5–10% decline is predicted in Asia-Pacific real estate investment volumes in 2023

After falling by 25% year over year, real estate investment volumes will continue to decrease by 5 to 10% in 2023. According to JLL on Tuesday, the “tumultuous” financial and economic conditions weighing on sentiment caused this prognosis.

According to JLL Asia-Pacific Chief Research Officer Roddy Allan, the optimism inspired by the thought of the epidemic coming to an end has steadily given way to prudence amid concerns about inflation, interest rates, and geopolitics.

Investor interest will, nevertheless, continue to be there in some industries. The real estate company anticipates a 6% increase in capital flows into hotels and hospitality assets in 2023, following a 10–15% increase in 2022 due to border reopenings.

Data centres, logistics, multi-family, and greenfield projects in emerging areas like India and Southeast Asia are among industries that could profit from structural tailwinds and higher potential returns.

Due to a weak yen and low borrowing rates, JLL anticipates that Japan will be the most alluring real estate investment location. Singapore, which is seen as a safe haven, comes next, followed by Australia, which has a very transparent system and little volatility.

Regarding ESG trends, JLL also found that almost three out of four businesses would be willing to pay more for the privilege of leasing green or sustainable structures.

Due to a supply-demand imbalance, there is also potential in rental premiums for green-certified buildings. According to JLL, there are currently not enough green-certified buildings available to achieve the aggressive net-zero goals established by occupiers. By 2025, property occupiers in the Asia-Pacific region hope to acquire sustainability certification for at least half of their portfolio.

JLL anticipates that e-commerce will continue to drive the need for warehouse space, particularly in rising Asia, which has significant growth potential.

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I am Tyson Yuk, the founder of the blog Commercial Realty Singapore. With over 15 years of experience, my forte is in the commercial and luxury property line. With my blog, I aim to educate, advise and share tips and tricks with potential property buyers and investors to help them make successful property ventures.

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