Country for PR: Hong Kong
Contributor: PR Newswire Asia (Hong Kong)
Monday, January 13 2020 - 12:00
Colliers International: Asia property market outlook improves, thanks to positive macro news, fast-growing urban centres and low interest rates
HONG KONG, Jan. 13, 2020 /PRNewswire-AsiaNet/ --

- Asian property market prospects brighten as US-China trade situation eases, 
despite the social situation in Hong Kong
- Bangalore and Hyderabad should be two of Asia's three fastest-growing cities 
over the next five years, with Shenzhen and Guangzhou also strong 

- Persistent very low real interest rates to support sentiment and confidence 
among occupiers and owners 

- Hong Kong, Singapore and Tokyo, followed by Shanghai, to remain Asia's top 
occupier locations despite near-term pressures in Hong Kong and Shanghai
- Bangalore, Manila and Singapore should see firm rent growth over five years; 
Hong Kong rents to decline further 

- Aggregate property investment volume for Asia to pick up in 2020: predicting 
a 7% increase to USD129 billion. 

- Singapore and Tokyo office, hotel and retail assets hold investment appeal 
Logistics sector in China, South Korea and India and data centres promise 
higher returns, but investing in these areas requires expertise

Overall activity in Asian property markets remains firm, and recent 
developments brighten prospects for the coming year and should raise confidence 
among investors, developers and occupiers, according to a new report by 
Colliers International( (NASDAQ: CIGI; TSX: 
CIGI), a global leader in commercial real estate services. 

Despite headwinds, such as the general economic slowdown, trade situations 
between the US and China, and social situation in Hong Kong, the fundamental 
attractions of Asia's top occupier locations, such as Singapore, Tokyo, 
Shanghai, and even Hong Kong, remain little changed, notes Colliers' annual 
Asia Market Outlook report for 2020. Furthermore, economic prospects for the 
region have recently brightened, due partly to an easing of US-China trade 
situations, while the rapid growth of Indian cities and the emergence of new 
mega-regions in China is creating new centres for occupier expansion.

The Indian cities of Bangalore and Hyderabad are expected to be two of the 
three fastest-growing Asian cities between 2020 and 2024. In China, Shenzhen 
and Guangzhou should also outperform both the national and Asia city averages. 
Noting the dynamism of the region's urban centres, Andrew Haskins, Colliers' 
Executive Director of Research in Asia, observed: "Growth in Asia is driven by 
cities as much as countries. This was demonstrated by the firm investment 
activity recorded by many leading Asian cities in 2019 despite the uncertain 
conditions. While underlying trade issues may continue, persistent loose 
monetary conditions should raise confidence among both occupiers and owners."

Office sector: Top locations remain resilient 

In the office sector, while performance and outlook vary widely across markets, 
we continue to see Hong Kong, Singapore, Tokyo and Shanghai as the top 
locations in Asia for occupiers on socio-economic, property and human factors. 
Looking ahead, Bangalore, Manila and Singapore should see average rent growth 
of over 3% over three to five years, though Singapore faces consolidation over 
2020-2021. In Tokyo, pre-commitments are high and vacancy is low, but rent 
growth is moderating. Tier 1 China cities face high new supply. However, 
occupier sentiment is better in Beijing and Shenzhen than in Shanghai and 
Guangzhou, reflecting growth in technology and other sectors like healthcare. 
Hong Kong should again see negative rent growth in 2020, especially in the CBD.

Investment markets: Big city grit

The property market's resilience in Asia's major cities is evident in total 
investment volumes, which registered only a 3% dip in the 10 largest urban 
property markets compared to a 13% fall in the overall regional market in the 
first nine months of 2019. This is a healthy outcome in light of the challenges 
of the past year. Office assets make up the largest part of the investment 
market and, in Singapore and Tokyo, tenant demand for office space has been 
driving positive trends in hotels, retail and other sectors. Tokyo offices are 
still the best-value large asset class in core investment markets, offering a 
yield spread of about 3.5pp over 10-year bonds. Looking forward, easing trade 
situations, persistent low or negative real interest rates and increasing 
interest in emerging markets like India and new asset classes should help raise 
total Asian investment volume by 7% to USD129 billion in 2020.

Logistics/industrial sector and data centres: Higher returns, but correct 
strategies vital

Logistics growth in China is still strong, but e-commerce players and end-users 
are moving to new markets in Tier 2 cities; investors and developers need to 
follow. In South Korea, logistics assets west and south-west of Seoul are 
appealing, while Hong Kong industrial assets are attractive for conversion. In 
India, we recommend developers continue to expand in logistics by collaborating 
with corporate and government bodies owning land banks. Demand for data centres 
is surging due to the spread of cloud computing and 5G mobile, notably in 
China. Much investment is targeting this area despite high barriers to entry, 
but investors require adequate expertise to succeed.

Flexible workspaces: Reinvention key to expansion

Flexible workspace operators were one of the fastest growing segments driving 
leasing demand in Asia between 2017 and 2019. The market continues to flourish 
despite the challenges faced by sector giant WeWork and some smaller regional 
players; for example, other operators such as IWG and The Executive Centre have 
withstood the pressures and are expanding steadily. We do not expect reduced 
demand from flexible workspace operators to constitute a significant new 
downward force on absorption of office space across Asia, though there may well 
be pressures in certain markets. Looking forward, we expect greater 
collaboration between landlords and flexible workspace operators. This will 
help enhance the tenant experience through 'amenitisation' and create an ideal 
environment for future growth in this segment.

About Colliers International

Colliers International (NASDAQ: CIGI(; TSX: 
CIGI( is a leading global 
real estate services and investment management company. With operations in 68 
countries, our 14,000 enterprising people work collaboratively to provide 
expert advice and services to maximize the value of property for real estate 
occupiers, owners and investors. 

For more than 20 years, our experienced leadership team, owning approximately 
40% of our equity, have delivered industry-leading investment returns for 
shareholders. In 2018, corporate revenues were $2.8 billion ($3.3 billion 
including affiliates), with more than $26 billion of assets under management. 
To learn more about how we accelerate success, visit our 
website( or follow us on 
Twitter( and