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Institutional-grade assets are expected to remain in-demand in the Asia Pacific (APAC) region next year due to its consistent economic growth, according to Colliers International’s 2015 Property Outlook.
However, investors will continue to look outside the region for opportunities, given the compressed yields and lack of available supply, said the consultancy. Nevertheless, the volume of capital that will enter Asia is expected to be more substantial compared to those seen in recent years.
Additionally, the consultancy forecasts a positive outlook for APAC’s industrial property scene as the US economy shows signs of continued recovery. The region’s export-driven nations will benefit from this key economic driver, and there could be a surge in demand for logistics space next year, it said.
“To put it simply, the volume of deals in the logistics sector should boom in 2015, with a diverse range of activity including the sale of individual properties, equity investments and joint ventures,” said Tammy Tang, Executive Director at Colliers International.
Likewise, the outlook of Asia Pacific’s office market is very positive in light of the gradual recovery of the global economy. In particular, Singapore’s office sector will continue to be the darling of investors in 2015 thanks to the limited supply of office space, which will lead to higher rents and capital values, as well as healthy occupancy rates.
Finally, the region’s retail property segment will benefit from the rapid growth in middle-class families, rising spending power of the younger generation and sustained pace of urbanisation across the continent.
“Those are all positive factors and look set to continue for at least another five years. In general, the direction is towards increased consumer spending, and as a result demand for retail real estate looks strong in 2015,” added Colliers International’s Senior Director Helen Mak.
Specifically, Singapore’s retail property scene is expected to thrive due to the republic’s status as one of the three most-favoured destinations for mainland Chinese tourists, which are forecasted to hit 140 million in 2015. The consultancy also projects that one-third of outbound visitors from China will go to Hong Kong, South Korea and Singapore.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg.
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