20220629-莱坊-Asia_Pacific_Rising_Capital_in_Uncertain_Times_2022_17页_4mb

Summary of Active Capital Asia-Pacific Report (Rising Capital in Uncertain Times)

Overview

The report provides historical insights into the Asia-Pacific (APAC) real estate market and its predicted performance for 2022, serving as a guide for investors. Key themes include the impact of global uncertainties, such as the pandemic, on capital flows and asset investments, with a growing emphasis on Environmental, Social, and Governance (ESG) factors. Despite economic headwinds, the market shows resilience, with predictions for increased investment volumes and a focus on sustainable development.

Key Predictions for 2022

• Cross-Border Capital Flows: APAC cross-border investments are expected to reach record levels in 2022, with US dollars and regulatory shifts driving allocations. US investors are projected to be the largest capital source, and outbound capital from China will rebound.
• Asset Class Preferences: Office spaces, particularly prime-grade buildings, are anticipated to remain highly targeted due to the post-pandemic shift toward hybrid work models. Logistics, retail, and industrial assets are also expected to see strong demand.
• Drivers and Risks: Drivers include heightened US dollar strength, record dry powder, and asset rotation to sustainable assets. Risks involve risk aversion, limited investment stock, bid-ask spread widening, and inflationary pressures that may dampen activity.

Environmental, Social, and Governance (ESG) Focus

• The APAC market is increasingly integrating ESG into investment strategies, with cities like Singapore, Sydney, and Wellington leading in sustainability metrics. Green financing tools, such as green bonds and certifications (e.g., BCA Green Mark), are growing rapidly.
• ESG influences asset performance, with green buildings commanding premium valuations and serving as inflation hedges. Real estate developers and investors are actively repurposing assets (e.g., hotels to co-living or offices) to align with ESG goals.

Regional Insights

• China: Investment rebounded in 2021, with strong demand for industrial and logistics assets. Cooling measures in 2022 may moderate growth but do not change its position as a key destination.
• Hong Kong SAR: Investors are increasingly interested in ESG-aligned assets, with green bonds and sustainable financing gaining traction amid policy support and global ESG awareness.
• India and South Korea: India's real estate market remains attractive with focus on warehouse and retail assets, while South Korea's institutional investors drive outbound capital, primarily targeting office and industrial sectors.
• Australia: Low interest rates and affordability issues fuel demand for real estate investments. Green certifications and sustainability are key differentiators.

Challenges and Outlook

• Short-term risks include geopolitical tensions, inflation, and regulatory changes that could slow capital inflows. However, long-term structural fundamentals support sustained investment activity in 2022, with APAC poised to lead globally in sustainable real estate development.

Conclusion

The APAC real estate market is navigating uncertainty with a blend of traditional and sustainable investments. Strong capital flows, ESG integration, and regional variations highlight opportunities, while risks require strategic adaptation by investors.