THE PATH TO A NEW NORMAL: MANAGING THE FORESEEABLE AND HOW TO PLAN THE UNEXPECTED

The mid-year market outlook from CBRE Asia Pacific Research is available.
This report goes over the predictions we made earlier this year into our 2021 Asia Pacific Real Estate Market Outlook and evaluates what we did wrong and what we did wrong.
CBRE Asia Pacific Research gave themselves a “B" rating this year, as while the forecast of a recovery in most markets proved correct, the growth momentum was weaker than expected.
On the economic front, most markets have seen a steady rebound in the first half of 2021, but the reintroduction of measures to contain the spread of new COVID-19 variants has dragged the recovery. Unlike other regions, inflation and interest rate hikes are not the main concerns in Asia Pacific, but geopolitical conflict remains a risk.
In the office sector, leasing demand has gradually improved in the first six months of the year from its lowest point in 2020. However, office utilization continues to fluctuate along with sustained increases or decreases in COVID-19 infections. , leading to a slower-than-expected return to work and a tepid recovery in rents.
While retail sales in most Asia Pacific markets surpassed or returned to pre-pandemic levels in the first half of 2021, falling rents have gained momentum in recent months along with the reintroduction of lockdowns and other restrictions on the social and commercial activity. However, CBRE expects regional retail rents to stabilize in 2022.
Growing e-commerce penetration and occupants’ focus on resilience ensured that the logistics market continued to outperform other commercial real estate sectors. With the supply chain disruption set to continue for the remainder of the year, companies will need to take steps to improve supply chain resilience, leading to long-term inventory demand.
As expected, commercial real estate investing activity increased significantly in the first half of 2021 as investors moved to distribute capital after a quiet 2020.
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