CBRE Remains Upbeat On Asia Pacific’s Commercial Property Market

ASIA PACIFIC – Despite falling commercial property transactions amidst rising interest rates and an uncertain economic outlook, CBRE is making a contrarian investment advice to investors to purchase office assets, hotels, and retail units, while divesting logistics properties in the region, reported the South China Morning Post (SCMP) on Thursday morning (9 March, SGT).

In its Asia Pacific Real Estate Market Outlook 2023, the real estate consultancy said these three asset classes – office, retail, and hotels – offer significant upside opportunities as the commercial property market outlook in the region turns relatively positive.

While these asset classes were negatively impacted during the COVID-19 pandemic, CBRE expects them to bounce back quite well, with rentals likely remaining solid and occupier demand rebounding. On the other hand, it foresees growth in industrial & logistics assets to weaken.

In particular, the real estate consultancy’s CBRE’s Head of Occupier Research & Head of Data Intelligence and Management for Asia Pacific, Ada Choi, stated that the return-to-office trend in the region is in full swing, leading to robust demand for firms to lease good quality office buildings, with the momentum in the region led by Hong Kong and Mainland China.

“The fundamentals are pretty solid, particularly for newer and high-quality environmental, social and governance (ESG) compliant buildings in central business districts where occupiers want to be located. Hong Kong is one market that we particularly like because we will probably see the market turn around the corner,” she said.

However, Choi revealed the definition of a central business district is shifting for office tenants, at least in Hong Kong.

“Our studies show that people are looking for destinations with a good transportation infrastructure like Kowloon Station,” she added.