Asia Pacific commercial real estate investment is likely to top US$150 billion this year, a new record driven by local institutional investors who have as much as $500 billion to invest, according to US property management firm CBRE Group Inc.
It foresees strong investments from closed-end real estate funds, real estate investment trusts and institutional investors, including many that had put acquisitions on hold when the coronavirus crisis erupted two years ago.
In spite of the fact that the Omicron variant is causing new cases to skyrocket in many countries, CBRE does not expect it to derail economic recovery in Asia Pacific given the high vaccination rates in the region.
“It is estimated that institutions in Asia Pacific have up to $500 billion in equity on their balance sheets awaiting deployment,” the firm says in a statement on January 13.
Its investment forecast for 2022 would erase the pre-pandemic peak of $142 billion set in 2017. The firm did not give the investment figure for 2021.
CBRE expects logistics assets, which have been sought after in recent years, to continue to be in demand. It also predicts stronger interest in premium office space that conform to environmental, social and governance criteria, as employees return after working from home for much of the last two years during the pandemic.
“Active asset management and enhancement with a focus on ESG and repositioning properties will be prominent themes for investors in 2022, fuelled by narrowing prime yield spreads and an emphasis on rental income,” Henry Chin, head of research for Asia Pacific at CBRE, says in the statement.