A weight of unallocated capital, low interest rates and early signs of emerging value in some markets suggest that we may be on the threshold of a rise in real estate transaction volumes. Despite the stop-start nature of containment measures, looser government restrictions and greater travel freedoms will also begin to dismantle barriers to deal making in the region.
Simon Smith, Savills Research
Australia
Throughout the pandemic, there has been continued demand for quality assets with long WALEs and secure tenant covenants, with investors looking for both on and off market opportunities. Though sales volumes are down on the five-year average, with many assets currently on the market or in due diligence we are expecting a strong end to the year.
China
China's economic data remains largely positive as we enter the final quarter of a tumultuous year. Increasing confidence has led to the largely-recovered travel industry. improved consumption and sustained business resumption. Nevertheless, as policy support subsides, and prudence returns to the financial sector, the property sector could be faced with renewed headwinds.
Hong Kong
Having successfully navigated a third wave of cases, Hong Kong rents and values continue to drift down but at a slower rate while transaction activity ticks over at muted levels. All eyes are on the state of occupier markets which are expected to remain challenging to year-end.
India
The economic devastation of the virus has started to fade, and businesses are showing early signs of recovery. The silver lining for investments is likely to emerge through opportunities in select real estate asset classes including warehousing, industrial. hospitality and residential properties, as valuations reach attractive levels.
Indonesia
The Omnibus Law, which was recently approved by Indonesia’s Parliament, is expected to support government’s effort to attract more investment and create a more conducive business environment. In the property sector, the new law includes provision for a relaxation of foreign ownership restrictions, something which we expect to boost growth in the luxury apartment market.
Japan
Investor appetite for defensive assets gained further traction in Q3/2020 as Japan’s stability increasingly drew international capital. Meanwhile, the nation’s newly elected leader is expected to pursue a broader range of much needed structural reforms.
Malaysia
Despite the continuing impact of the coronavirus, a significant increase in transaction activity year on year offers an encouraging economic outlook moving forward.
Singapore
With improving cross border mobility, investment sales activity is expected to increase in the coming quarters.
Korea
Investment activity in the office market picked up significantly this quarter on completion of new buildings with forward commitment, with the annual sum invested in 2020 expected to reach the historical peak volume recorded in 2019.
Taiwan
Real estate market sentiment recovered significantly in the third quarter given successful COVID containment and record low interest rates with the added benefit of strong demand from the tech sector.
Thailand
Confidence in Thailand’s tourism and export-lead economy remains extremely fragile this year and into next, although successful containment of the coronavirus is currently providing some support to market activity.
Vietnam
Enquiry levels are running high across many sectors and have returned to pre-COVID levels. Industrial and logistics are particularly favoured as these asset classes are seeing an accelerated period of evolution.