Asian Pacific At Forefront Of Return-to-office Wave
ASIA PACIFIC – Property consultancy CBRE said it is evident that the region is vanguard of the return-to-office wave, reported The Edge on Friday morning (1 July, SGT).
According to CBRE’s Research Head for Asia Pacific, Henry Chin, he witnessed a stark difference between the region’s office market and that of the US – while he was visiting the office space across the latter, many were still underused. Conversely, most workers have already returned to their workspace in Singapore, Hong Kong, and Sydney.
This shows that Asia Pacific is leading in the return-to-office wave, and future demand for office space in the region is expected to rise, noted Chin.
Data from CBRE supports this forecast. Based on its office tenant survey in May, 47 percent of the respondents expect to increase their workspace in the next three years and only 23 percent expect to reduce their property footprint. Comparatively, there was a near 50:50 split between those who want to add more office space and those who to downsize in both the US and EMEA (Europe, Middle East and Africa).
This upbeat prospect continues to support major office deals in the region, especially in Singapore. In April, KKR concluded its S$598 million acquisition of Twenty Anson in Tanjong Pagar. AEW bought Westgate Tower in Jurong East for S$680 million in June.
Earlier the same month, Capitaland Investment purchased an office tower in Melbourne’s central business district (CBD) CBD for A$320 million (S$317 million).
CBRE highlighted that office properties continue to account the biggest proportion of property deals in the region during the first quarter. Of the US$31.2 billion (S$43.2 billion) in total volume, the office segment contributed almost 50 percent at US$14.8 billion.
And overall investment momentum in Asia Pacific is going strong amid rising market sentiment. For the whole of 2022, overall deal volume across all property categories is expected to hit up to US$150 billion, up 5 percent on annual basis and a new full-year record if attained.
“Investors are coming here to look for deals across all asset classes,” noted Chin.
CBRE expects office properties and logistic assets to remain popular among investors due to robust fundamentals, as well as liquidity and transparency.
Another reason is global flight-to-quality trend. “A lot of APAC office supply is quite new, whereas a lot of the US office supply is made up of older stock,” he explained.
Apart from offering better quality spaces for office tenants, the newer office supply also makes it easier for commercial property owners and investors to renovate existing buildings to meet the rising demand for Grade A office space.