Pandemic Impacted Property Rents In Asia, But Prices Remained Stable
ASIA PACIFIC – Rents of office, retail, industrial and residential properties declined by about 15 percent on average across the region during the first 6 months of 2020 during the onset of the COVID-19 pandemic. Nonetheless, real estate prices for most of Asian Pacific remained stable, according to the findings of a research that was published on Media OutReach on Thursday morning (2 December, SGT).
Based on the stated entitled The COVID-19 Pandemic and Commercial Property Rent Dynamics, office rentals fell moderately by roughly 14 percent. But the most significant and continued decline in rent was recorded in retail properties, like shopping centres, where rents plunged by more than 30 percent during H1 2020.
“The study found a negative relationship between the number of COVID-19 confirmed cases and deaths and market rent in the region. Interestingly, property prices in the overall market did not fall despite the drastic drop in rents,” wrote the study’s authors Dr. Ervi Liusman and Professor Desmond Tsang from the School of Hotel and Tourism Management at The Chinese University of Hong Kong (CUHK) Business School.
Aside from that, the study shows that Asia Pacific was the first region to be significantly affected by the pandemic. In fact, property transaction volumes fell by 32 percent during the first 6 months of 2020.
During the same period, commercial real estate investment deal volume has dropped by 29 percent globally, while inter-regional investment has plunged by 61 percent during the second quarter.
Notably, the research analysed the trends in rents and property prices obtained from property consultancy Jones Lang LaSalle (JLL). The data consists of property rents and prices in 38 cities across 12 countries and territories in Asia Pacific, including Singapore, Hong Kong, Tokyo, and Kuala Lumpur.