JLL projects real estate growth in Asia Pacific
JLL, the country’s largest real estate professional services firm, projects that Asia Pacific transaction volumes will grow five percent to reach US$135 to US$140 billion this year.
This increase, according to them, will be driven by continued momentum in core markets and increased interest in the region’s developing markets.
Just this 2017, Hong Kong recorded the world’s highest transaction for a single office block with the sale of The Center for US$5.2 billion; hotel conglomerate Accor acquired Australian Mantra Group’s portfolio of serviced apartments for US$1.2 billion; and CapitaLand Investment Trust bought Singapore’s Asia Square Tower 2 for US$1.5 billion.
Looking ahead, JLL reveals some of the major trends that will shape the year to come.
Investors will seek opportunities in the alternative real estate sector such as aged care/senior housing, student housing, education, data centers, and self-storage facilities to diversify their portfolios and for long-term growth.
“We’re observing growing interest and a huge opportunity for alternatives in real estate,” states Dr. Megan Walters, Head of Research, JLL Asia Pacific. “Demand in these sectors clearly outweighs supply, and the demographic demand drivers in the region are growing quickly. Yields on self-storage facilities are attractive compared to other traditional asset classes, ranging from five to seven percent in Tokyo and Singapore, five to eight percent for Australia, and around eight percent in China and India.”
The convergence of property and technology – otherwise known as proptech – is the latest disruptor in real estate and is likely to pick up steam in 2018. Asia Pacific proptech startups have already received US$4.8 billion of the US$7.8 billion raised by global proptech start-ups from 2013 to 2017.
Jeremy Sheldon, Managing Director, Markets and Integrated Portfolio Services, JLL Asia Pacific, says: “In the long term, digitization of services, Internet of Things (IOT) adoption and automation will have a significant impact on corporate real estate strategy, team structures and processes.
The introduction of IoT – smart systems and devices operating over a network – will drive greater transparency of real estate portfolio utilization and performance. Smart buildings will help both building owners and occupiers improve performance and save costs.”
While managing costs remains a priority for most businesses, so is access to talent. With organizations using the workplace to boost employee engagement and attract and retain talent, there will be a continued rise in companies using co-working spaces in many parts of Asia Pacific including the Philippines.
Those that offer high-tech, personalized and innovative space offerings – such as collaborative workspaces, food and beverage, gyms and wellness areas – that create a human-centric experience will stand out and attract the best in the war for talent.
JLL Philippines Country Head Christophe Vicic is optimistic as well for the outlook in the Philippines. “We see the real estate industry growing throughout the region, and it is no different here in the Philippines.
Even the way we design offices now have an impact on how we recruit top talent. We’ve seen how companies here invest to get the best of the best, and the pace at which real estate is changing is nothing like we’ve seen before. It’s a very exciting time to be in this industry.”
He adds, “The companies we work with are not just growing – they are now smarter about how they use real estate and we are leaving no stone unturned in ensuring that we have the right tools, technology and services to keep up with the demands of our market.”