Restart - Uneven Recovery
Economy: CBRE expects Asia Pacific to experience a steady, albeit uneven, recovery this year as the region emerges from last year’s pandemic-induced disruption. Asia Pacific full-year GDP is projected to grow by 6.6% y-o-y, putting the region at the top of the global recovery curve.
Office: Cost-saving and CapEx constraints will be the key determinants of leasing decisions in H1 2021. Landlords will need to be more proactive in offering incentives to secure new lettings. Higher vacancy will expand occupier choice and provide tenants with the upper hand in negotiations. Tenants will actively evaluate space requirements and workplace design as staff gradually return back to office.
Retail: As the shift to e-commerce transforms shopping behaviour, retailers will focus on refining their online offering. While portfolio rationalisation and lease restructuring are set to continue, rising space availability will provide retailers with opportunities to reduce rental expenses while enhancing the quality of their store network. CapEx for new leases and store fitout will remain tight.
Logistics: Occupiers’ focus on enhancing network resiliency and boosting local inventory will support continued demand for warehouse space. Supply chain resilience will come under scrutiny as companies guard against disruption. Landlords are advised to futureproof portfolios by upgrading supporting facilities such as cold rooms and server rooms to cater to evolving occupier demand or redeveloping older facilities in prime logistics locations.
Capital Markets: Commercial real estate investment will continue to recover in 2021 with volume growing at 5-10% over the last year. Asset availability will improve with US$31 billion funds expiring and disposals by developers and corporates to free up capitals.