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Invesco Real Estate House View - Asia Pacific Market Outlook H2 2022

Invesco Real Estate House View - Asia Pacific Market Outlook H2 2022

Below is an excerpt from the Invesco Real Estate House View - Asia Pacific Market Outlook H2 2022. The full outlook is available on this dedicated webpage.

Asia Pacific real estate investment context - H2 2022

Post-Covid recovery; rising borrowing costs

Macro environment

  • Economic backdrop: key economies in the region except China and Hong Kong have re-opened borders and experiencing a post-COVID recovery.
  • Occupier fundamentals: despite the "feel good" sentiment of post-COVID, global economic uncertainty is keeping business expansion in check.
  • Capital markets: investment activity is expected to be muted in most markets amidst rising borrowing costs.

Asia Pacific investment execution response 2023-24

Industrial / logistics

  • Remain a focus.
  • Last-mile warehouses and cold storage in Australia, Japan and Korea enjoy structural tailwinds and signs of repricing emerge in Australia and Korea.

Residential

  • For lease residential (smaller units) in key metros of Japan.
  • Build-to-rent in Sydney and Melbourne, Australia as potential buyers may turn to rent amidst rising mortgage lending rates.

Others

  • Performance of Japanese hotels could rebound sharply as borders open.

Defensive execution and sharp asset selection

  • Conservative financing and leasing assumptions amidst uncertainties.
  • Widening performance gaps between top and bottom performers indicate the importance of asset selection.

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