However, investment activity is expected to slow in 2016.
According to CBRE's 2016 APAC Real Estate Market Outlook Report, investment activity in the region will remain strong due to Asia Pacific's steady economic growth, which will continue to outpace the rest of the world in 2016, though activity will be restricted by asset pricing and availability. udc qatar
"Real estate commingled funds and institutional investors will continue to be big buyers in the region's investment market. Institutional investors will continue to invest in Asia Pacific to diversify their portfolios by increasing their exposure to real estate "CBRE Asia Pacific's Head of Research, Dr. Henry Chin, said. "However, Asia Pacific's commercial real estate market will enter a phase of slower growth, with activity likely to moderate over the course of the year as it becomes more difficult to find investable stock that can meet investors' target returns. Interest rates are expected to remain low in 2016, resulting in largely stable yields across Asia Pacific. However, even with the increase in interest rates, we anticipate a moderate yield expansion in 2017."
Given the magnitude of its effects across the country, the economic slowdown in China, as well as higher-than-expected US interest rate hikes and currency volatility, will continue to be a major source of concern for investors. However, macro developments such as urbanization and the rise of the middle class will continue to drive growth in Asia Pacific in the medium to long term.
"In 2016, investors should concentrate on structural investment themes such as e-commerce expansion, regional tourism, and demographic changes. Niche industries such as self-storage, senior and student housing, and data centers would benefit from demographic shifts "Dr. Chin said.
"Australia and Japan will continue to lead active markets in the region, while India anticipates a positive year following the relaxation of FDI rules at the end of last year. Most foreign investors will continue to be interested in China, though demand will be limited to tier I cities. Overall, the region's long-term prospects are promising "he continues.
Asia-Pacific Office Companies have a positive long-term outlook for the area, as it remains a key growth market for many international firms, but they are cautious in the short term. Weaker market sentiment and a loss of trust among senior executives all point to office occupiers implementing more conservative policies this year, with cost reduction at the top of the priority list. The tech sector will continue to drive office demand in the majority of Asia Pacific markets, so demand is expected to remain high. Flight-to-value will increasingly supplant flight-to-quality as the primary motivator for relocation and consolidation, particularly among MNCs, and will shape locational preferences across the area. More occupiers in Asia will migrate to decentralized locations due to lower rents, new supply, and improved infrastructure, especially in markets like Beijing, Hong Kong, and Shanghai. In other countries, recentralization will benefit Tokyo and major Australian markets due to a surge of new high-quality supply in key areas, improved infrastructure, and/or attractive incentive packages. In Asia Pacific, rental growth is expected to slow to 0.5 percent in 2016 from 2.7 percent in 2015.
Retail in Asia-Pacific
In 2016, retailers will be more cautious due to high operating costs, especially rents and labor in Asia. Many retailers would turn their strategic emphasis away from extending their store networks and toward rationalization, in-store profitability, and upgrading to better locations. Leasing activity will vary by market, with Australia, Japan, and New Zealand being the most optimistic, while Hong Kong and Singapore will remain in the red. Southeast Asia will see strong leasing activity as a result of ongoing urbanization and wage rises. F&B retailers will drive demand in the area, but affordable and niche luxury brands will also be present. To maintain foot traffic, shopping malls will be forced to embrace retail-tainment and change their trade mix to include more experience-oriented retailers as online shopping becomes more common. In 2016, 63.8 million square feet of new shopping center supply is expected to be installed. In 2016, total retail rents are expected to undergo a mild correction of less than 1.0 percent due to weak leasing demand and abundant new supply.
Logistics in Asia-Pacific
In 2016, occupant demand for logistics space is expected to remain high. Despite the current challenges facing the export sector, the logistics industry will continue to benefit from the rapid growth of e-commerce, as both conventional and Internet retailers increasingly turn to the internet to generate sales. This structural shift is expected to benefit all markets, especially Australia, Hong Kong, Japan, Singapore, South Korea, and Taiwan. Consolidation for improved operations and the conversion of older facilities into high-end logistics assets such as cold storage and consolidation centers will be other major trends this year. In 2016, approximately 45.6 million sq. ft. of new logistics supply is expected to be delivered, with approximately 54% of that in Greater Seoul, Singapore, and Greater Tokyo.