Office Market To Draw In 50% Of Asia Pacific’s Inbound Investment Volumes

ASIA PACIFIC – Knight Frank believes that 2022 would be a record year for cross-border property investment deals in the region, with investment volumes forecasted to jump by about 33 percent, according to a report that was published on Wednesday (13 October).

In particular, Asia Pacific’s office property market is expected to draw in more than half of all inbound real estate investments into the region, with the top recipients expected to be Australia, Japan, and Greater China.

Knight Frank’s latest Active Capital Report stated that inbound property investment in the region is expected to be propelled mainly by the re-emergence of US-based investment managers and private equity interest in office assets, and the top sources of capital are likely to be Germany, the UK, Canada, Singapore, and the United States.

The property consultancy believes that the region’s office property market will be the most invested sector next year, followed by industrial and then retail assets.

“The results from this year’s report are a welcome sign of the continuing recovery in the region, linked to the resurgence of global cross-border investment into real estate,” said Knight Frank’s head of global capital markets, Neil Brookes.

“Indeed, as the world moves into the next phase of living with the pandemic, we could see a roaring 20’s effect for real estate in 2022,” he noted.

For Asia Pacific’s outbound property investment, the United States is expected to be the largest recipient, driven by the chance for scale across different asset types, stated the report. An example it cited is Singapore government-linked entities buying platforms in the data centre and multifamily residential segments.

The report also foresees that investors from Asia Pacific will deploy more capital in the UK as business travel resumes and borders reopen. It expects that demand for office properties in the UK and European gateway cities would be robust, likewise for pan-European logistics.

Globally, the top destinations for cross border property investment next year are expected to be the US, UK, Germany, France and the Netherlands. In particular, the US, Canada, UK and Germany are projected to be the biggest deployers of cross border capital, led by financial institutions, private equity investors, and investment managers.