The View | Asia’s real estate investors find escape from coronavirus in sheds and beds
- Rise in online shopping and people working from home has driven spike in demand for last-mile logistics and warehousing space
- Multifamily housing also seeing increased interest as pandemic increases appeal of properties that benefit from income stability and high occupancy
The deterioration in fundamentals was much sharper in the retail sector, where average rents in the region fell 2.4 per cent quarter-on-quarter. It was the sharpest quarterly decline since the 2008 financial crisis, CBRE noted, exacerbated by the accumulation of shocks faced by Hong Kong’s economy.
In the commercial property investment market, the top 10 cities in the Asia-Pacific region all suffered double-digit year-on-year declines in transaction volumes, according to property consultant Real Capital Analytics. It notes that the slowdown “had already been apparent for some time”.
Judging by the appetite for deals displayed by the property arm of German insurance giant Allianz, though, there are evidently some bright spots in Asian real estate. In the last several weeks alone, Allianz Real Estate has acquired a logistics portfolio of four Aldi distribution centres in Australia, in a joint venture with a local investor, and a collection of prime multifamily residential assets in Tokyo.
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Then and now: Asia-Pacific landmarks emptied by the coronavirus pandemic
The first is differentiation. While all asset classes have suffered, the performance and resilience of each sector have varied markedly. As McKinsey noted in a report published in April, “the market seems to have pivoted mostly on the inherent degree of physical proximity among an asset class’ users,” which explains why the hospitality and retail sectors have fared the worst.