Patrick Schulze

In our last APAC output for 2024, we take a look forward to 2025 and what might be in store for CRE in markets in the region. On latest forecasts, a few headline numbers: • Regional economic growth of ~3.7% - stable on 2024 - with some rebalancing of growth across the region. • Grade A Office net absorption of 72msf in 2025 and an average of 75msf over the 2025-29 forecast period. This will be exceeded by new supply, pushing vacancy towards 20% over the next 3yrs. • Comparatively muted rental growth at the regional level of ~2% per annum, but with wide variation at the market and sub-market level. • Industrial demand to recover in line with the global economic recovery. Rents are forecast to rise in 60% of markets analysed. • Momentum in the investment market, supporting ongoing improvements in volumes. Property values to mostly remain stable. To read more on the regional overview as well as individual market performance, please visit the landing site and navigate from there. As ever, a huge thanks to the team: Anna Town Catherine Chen Chek Yee Foo Jake Mckinnon John Carlo Garcia, CDMP Mari Kumagai Rosanna Tang Sean Ellison Shaun Brodie Shona Baxter Sukyoung (Suki) Kim Suvishesh Valsan Xian Yang Wong , CFA

43

In this Growth Hubs Index 14 out of the top 15 fastest-growing cities are in Asia, with Bengaluru (India) leading the pack, followed by Ho Chi Minh City (Vietnam) • Infrastructure investment is driving growth across regions: Vietnam leads with 6% GDP investment including $134.7B in green energy projects, while China's Greater Bay Area (home to 86M people) focuses on mega-region connectivity, and India commits to major urban transport expansion • China's tech transformation sees 5 cities (Shenzhen, Guangzhou, Suzhou, Wuhan, Dongguan) in top 15, focusing on semiconductors, EVs, and solar technology - Innovation • India's major cities broke office space and warehousing records in 2023, with projections of 96M sq ft of new life sciences real estate by 2030 - Real Estate • Saudi Arabia's Riyadh (only non-Asian city in top 15) expects 26% population growth, expanding from 5.9M to 9.2M in next decade, with 67% under age 35 - Demographic

16

1 Comment

In the shifting landscape of real estate, key industry voices are engaging in a crucial discussion. Paul Tostevin and Kelcie Sellers from Savills World Research, Simon Smith, head of research for Savills Asia Pacific, and Rick Schuham, CEO of Savills Global Occupier Services in Denver, are examining potential opportunities emerging worldwide. Asian cities are one focus, particularly those gaining from a 'demographic dividend'. There's also significant interest in global infrastructure and energy investments. New working methods and talent hotspots are other areas of interest. These developments suggest various real estate opportunities for investors, developers, and occupiers as major global trends converge. Read more here:

1

The transformation of Jurong East is a testament to the dynamic urban development and forward-thinking planning in Singapore. With the recent announcement of the Tang Dynasty city site's conversion to residential use, we are presented with a unique opportunity to shape the future of living in this burgeoning district. https://lnkd.in/g--RX28x The strategic location, coupled with a generous plot ratio of 4.6, opens up a myriad of possibilities. Whether it's public housing that fosters community spirit, private condominiums that offer exclusive amenities, or perhaps a blend of both that caters to diverse needs, the key lies in aligning development with the #demand_gap and the #aspirations of the community. . Personally, I hope there are more homes catered to lower-income households so that they can enjoy the same amenities at the same time. As we envision the future of Jurong East, we must consider how residents will integrate living, learning, working, and playing into their daily lives. The concept of long-stay serviced apartments, with their blend of flexibility and stability, could very well complement the existing urban tapestry, catering to both transient and long-term residents. This could help, for instance, provide affordable accommodation for foreign medical workers to ensure our healthcare system continues ticking. However, more layers of data and time are needed to think through the best calibration. Exciting times indeed! P.S.: What can we learn from the downfall of the Tang Dynasty City? What can we do differently now than before? A question that requires deeper pondering.

31

2 Comments

For Singapore, the net take-up of Grade A CBD space was 370,000 sq ft net lettable area in 2023, a significant drop from the pre-Covid-19 five-year average of 1 million sq ft. The shift to hybrid working has altered Singapore’s office-centric culture, while ESG requirements from occupiers are set to drive the repurposing of sub-prime properties. Dive deeper into this topic in part four of Savills Offices in Equilibrium Q&A series, available at Savills Impacts.

13

How much currency do #investors place on #sustainability? JLL sees that a higher sustainability score was a major factor in #Japan's rise in its biannual #GRETI research. According to Nikkei Asia analysis, tighter #environmental and mandatory climate risk disclosure helped lift #Japan from sixth place to second in the category. Furthermore, investor money has gravitated toward highly transparent real estate markets amid heightened economic volatility risks, said Ben Breslau, chief research officer at JLL. Roddy Allan; Matthew McAuley; Masha Seymour; Imran Khan; Tina Gupta; Megumi Terakado

21

Integrated developments are often perceived as premium investments with their prices reflecting the high demand. Leveraging insights from DataSense by PropertyGuru, we delve into the sustained appeal of these developments in Singapore's secondary market. Discover the full analysis in our latest report. https://lnkd.in/gnEcf3bD #PropertyInvestment #SingaporeMarket

25

Green Mark certification vs. traditional buildings—how do operational costs compare?    Explore the cost benefits of sustainable buildings in our latest blog.   Read more: http://sav.li/zwb   #SavillsSingapore #Sustainability #GreenMark #RealEstate Samuel Han JianChou Edith Choong Effendi Asngari Navaneethakrishnan Soundhararajan

22

1 Comment

Asia is spearheading the global prime residential market recovery, accounting for four of the top five performing cities (Manila, Tokyo, Mumbai and Delhi) led by Manila according to Knight Frank’s latest edition of the Prime Global Cities Index. Manila leads the charge with a staggering 26.2% annual price growth, followed by Tokyo at 12.5%. Indian cities are also showing remarkable strength, with Mumbai's prime housing market surging 11.5% and Delhi up 10.5% year-over-year. The strong 11.1% price appreciation in Perth confirms the resilience of key Australian luxury markets.

5

1 Comment

🏢 Asia Pacific Real Estate Market Insights, June 2024 🌏 Dive into our latest newsletter to uncover what’s shaping the APAC real estate landscape! *People moves: Discover the latest executive appointments setting the stage for innovation and growth, including new leaders at Bain Capital, Colliers, and Investa. *Capital raising & transactions: Unpack major transactions such as Goldman Sachs' $3.4bn real estate secondaries fund, Macquarie’s $1.9bn global opportunity fund, and Actis' new Asia DC platform. *Regional spotlights: -Greater China: From Hongkong Land’s substantial investment in Central to Swire and China Life’s purchase in Beijing, get the inside scoop on pivotal moves. -Japan & Korea: Learn about NTT Data’s pioneering data centre J-REIT and KKR and Weave Living’s second acquisition in Korea. -Southeast Asia & India: Explore PAG's significant acquisition in Singapore and Xander and GIC’s strategic asset purchase in India. -Australia & New Zealand: See how Dexus and Scentre are positioning with their latest transactions, GreenFort and Gaw’s land lease JV, alongside new appointments at CBRE and Lifestyle Communities. #RealEstate #AsiaPacific #MarketTrends #Investment #LeadershipMoves

29

Wondering how the 2025 Private Residential Property Market is shaping up? In this article, Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore, shares his insights on projections for sales and rental volumes, pricing trends, and the key profiles driving demand. Explore the supply and demand dynamics, as well as the global economic factors and interest rate trends expected to influence property prices in 2025. Read the full article here: https://livethere.com/blog Savills Singapore George Tan Jocelyn Choong Eleanor Tan Pamela Lai Rowena Teo Jasmine Eng Fion Wong Anni Kum #savillssg #Livethere #RealEstate #Singapore

9

The Asia Pacific region continues to expand amid uncertain economic conditions, though growth trajectories vary between advanced economies and emerging markets. GDP growth is forecast rebalance through H2 2024 into 2025, aided by forthcoming central bank interest rate cuts. We have seen the regional investment market stabilise in H1 2024. With USD70bn of dry powder capital targeting Asia Pacific poised for the recovery, expect activity to improve over H2 2024 before accelerating more meaningfully through 2025. While we advise investors to be mindful of potential downside risks, history tells us that the time to act is now. The Asia Pacific has recorded ongoing demand for office space - some 128msf across the region's top 2025 cities in the past 2 years. Muted rental growth to date is starting to accelerate in select markets, suggesting a window of opportunity exists for occupiers before markets start to shift. Learn about these trends and the strategic opportunities they present across our three key midyear outlook reports. All accessible via this link --> https://cushwk.co/3WqduHI As ever - huge thanks to the team for their contribution Catherine Chen Gordon Marsden Anshul Jain Arpita Srivastava Maxwell Love Chek Yee Foo Xian Yang Wong , CFA Rosanna Tang Suvishesh Valsan Sean Ellison Shaun Brodie Jake Mckinnon #office #outlook #asiapacific #cre #investment

27

2025 will be an interesting year for the Singapore office market. 1. Vacancy rates are poised to fall amidst lower new supply. There are pockets of secondary spaces emerging but overall levels look manageable. 2. With lower interest rates and steady economic growth, office leasing demand is expected to rise. Though some occupiers might continue to take a watch and wait approach given global economy uncertainties. 3. Grade A offices will see bulk of demand given flight to quality. 4. Despite ongoing market uncertainties, 2025 has the potential to be a breakout year, with demand and rents exceeding expectations due to a constrained supply pipeline.

24

Despite recent setbacks in its property market, Hong Kong retains significant advantages that it should leverage to carve out its niche in a changing global landscape, according to Christian Ulbrich, Global CEO and President of JLL. While the city may have lost some of its status as a leader in various property segments, Ulbrich emphasizes that its attractiveness as a financial hub remains strong. Ulbrich highlights Hong Kong's exceptional infrastructure, abundant capital, and talented workforce as key strengths. He urges the city to focus on its future role rather than dwelling on past achievements, noting its strategic location and connection to mainland China as enduring advantages. Overall, Ulbrich's outlook underscores Hong Kong's resilience and potential for continued success in the global property market. #RealEstate #FinanceCentre #Growth #Investment #Finance #Business #Economy #Innovation #Transformation #Travel #JLL I South China Morning Post SCMP I Brand Hong Kong I JLL Hong Kong I Cheryl Arcibal

21

Our latest APAC Outlook 2025 report provides in-depth analysis and forecast on inflation, interest rates, GDP growth, rental performance, and cap rates across 27 key markets in Asia Pacific. Stay informed and strategically prepared in the new year! #cushmanwakefield #asiapacific #APAC #realestateinvestment #office #industrial #logistics #capitalmarkets

5

Earlier this week, I had the privilege of chatting with Lynlee Foo to discuss JLL's recently launched Global Real Estate Transparency Index (GRETI) 2024. Into its 13th edition, this index is a unique benchmark of market transparency for property investors, developers and corporate occupiers. To learn more about GRETI, access the report here: https://lnkd.in/dPCiVxJ2 Singapore has climbed to the "Highly Transparent" band for the first time ever, joining Japan as the two most transparent markets in Asia. Asia Pacific has shown the strongest average transparency improvements since 2022 driven by regulatory advancements, technology adoption, better data availability, and sustainability initiatives. Here are some key takeaways: - In a dynamic and evolving real estate landscape, transparency plays a pivotal role in aiding investors, occupiers, and governments in making informed decisions. Highly transparent markets like Singapore, which account for over 50% of global income-producing real estate and 80% of direct investment, are in high demand. - Singapore’s recent accomplishments can be attributed to extensive market performance data, robust corporate governance standards, and sustainability initiatives, making Singapore an attractive destination for global investors. - While progress has been made, there are still challenges for Asia's real estate industry to achieve higher transparency. These challenges include disparities between cities, regulatory complexity, data availability in emerging markets, climate and sustainability reporting, technological integration, and proactive regulation.

33

What legacy does Knight Frank’s director for ESG, Jackie Cheung, want to leave behind? With a mission to lead the charge in sustainable urban transformation, he hopes to unite real estate stakeholders together to share the same values. Cheung, who appears on the cover of The Peak’s October 2024 issue, believes that all three pillars of ESG are equally important. Find out why and his take on the biggest challenge in the real estate industry. Read more: https://lnkd.in/gZ6tbP8R #realestate #thoughtleadership #esg

8