Rolling annual investment volumes have now stabilised across most commercial real estate sectors and in some cases have moderately increased.
Investment volumes are expected to continue to recover, with investors targeting sectors and markets with strong income growth. This will favour logistics and industrial assets as well as key alternatives assets including data centres and selective “living” assets. Retail assets are also expected to attract greater investor interest.
Outside of Hong Kong, China and Australia, which have seen the most significant price declines, there has been limited evidence of repricing across the rest of the region. Consequently, there is limited scope for price growth in the near-term. Indeed, as transactional markets become more active, this could prove the catalyst for further price discovery in markets with weaker outlooks.
Significant dry powder capital is still waiting to be deployed – some USD70bn as at Q1 2024, with nearly two-thirds targeting debt, opportunistic and value-add assets. A key component of the outlook remains in marrying available capital to appropriate investment opportunities.
