Colliers International released the Asia Market Snapshot Q1 2019 report, which examines the performance of 15 Asian real estate markets across residential and commercial segments and provides an outlook for the quarter ahead.
At a glance:
- Logistics in focus across developed & emerging markets - China outlook positive on the back of government initiatives - Japan cautiously optimistic amid looming consumption tax hike - Hong Kong poised for rebound following announcement of revitalisation scheme - Singapore commercial and hotel sectors remain buoyant, residential subdued - Terence Tang, Managing Director of Capital Markets and Investment Services, Asia, at Colliers commented: "Real estate markets across Asia started the new year - on a positive note, with friendly government policies, tax reforms and infrastructure spending propping up demand. In the first quarter, investors are seen diversifying away from more traditional sectors such as office space and housing into segments such as data centers and warehousing."
Tang Wei Leng, Managing Director of Colliers International, Singapore, said, "In Singapore, the hospitality sector continued to grow in Q1 2019 driven by keen interest from investors and developers who shifted focus to non-residential sectors. The commercial sector also enjoyed some deals after months of negotiations and due diligence thanks to a recovery in the office rental market and limited short-term supply opportunity."
Industrial sector in focus
Emerging infrastructure, investment trends and government incentives have put the industrial sector firmly on the radar of investors and developers across the region. In Hong Kong, the relaunch of a massively popular scheme that reduces the costs and complexity of repurposing industrial buildings is expected to make the sector a standout performer in 2019. Meanwhile in India, greater clarity on tax structures and the introduction of 'single window' approvals have stoked interest in the development of international-class industrial townships. The sector is also expected to benefit from improved connectivity along Thailand's Eastern Economic Corridor (EEC), a manufacturing zone on the eastern seaboard, while in Vietnam surging interest on the back of US-China trade tensions is powering the growth of factory and logistics facilities in the country's west.
China thrives on government policies
The real estate market in the Pearl River Delta continues to see rising transaction volumes - up 32% over Q1 2018 to USD1.58 billion - due to development-friendly government policies that are attracting new businesses and high-end talent. In Beijing, decentralisation remains a key theme as planners seek to promote development in the outlying districts of the nation's capital. In Chengdu, government initiatives such as the Key Projects Plan 2019, which aims to plough investments worth over RMB3.4 trillion (USD506.4 billion) primarily into basic infrastructure, are contributing to a positive outlook for the city's residential, office and retail markets.
Japan cautiously optimistic
Japan's real estate market is cautiously optimistic despite a looming consumption tax hike in October, supported by tight conditions and strong balance sheets. Foreign and domestic investors are likely to find value in provincial markets like Osaka which, while less economically robust than Tokyo, offer under-utilised assets.
Hong Kong poised for a rebound
Hong Kong's property market took a hit from the economic uncertainties and weak stock markets triggered by the US-China trade tensions, keeping aggregate investment activity low. However, things are already beginning to look up with demand reviving and the announcement of a highly awaited industrial revitalisation scheme.
Singapore commercial assets shine
Commercial property in Singapore is expected to remain highly attractive to investors and developers, with office rental growth continuing. Rising visitor numbers combined with tight supply is also raising revenue forecasts in the hotel sector. Activity in the residential space is expected to be relatively subdued in the second quarter as developers focus on new property launches.