2022: What's Changing For Real Estate Investors?

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The disruption brought about by the pandemic has investors looking to future-proof their portfolios or recalibrate their strategy towards real estate assets that are performing best today. 

Rapid investment being allocated towards housing, increasing development of data centres, and a red hot warehousing and industrial segment tell stories of a slight shift. 

2022 APAC Real Estate Outlook - Colliers

🏗 Overall, industrial and warehousing assets will be the highest-in-demand real estate assets in the APAC region, with over 20% of investors expecting capital value gains of between 10%-20%. 

🏢 Core Plus Offices will be a favourite asset class for regional investors in Tier 1 cities like Singapore, Sydney, and Tokyo. 63% of the respondents in the survey indicated a willingness to invest in these assets, versus 54% last year.

📌 A Core Plus strategy seeks real estate with high-quality tenants, in good, not great locations. Core plus properties tend to be of slightly lower quality than Core properties and are purchased more aggressively, with more debt.

🛒 Investors see significant potential for the appreciation and repurposing of retail assets, and around a third of the investors planning retail allocations are targeting opportunistic (including change of use) investments.

📌 Opportunistic investing and ground-up development are synonymous. This is the riskiest category and often presents a classic boom/bust return profile. These investments are made with as much debt that a bank will allow. 

The India Story

Per the report, Indian real estate has been resilient in the face of the pandemic. For the nine months ended September 2021, investments were recorded to the tune of $3.5 billion, almost 75% of the quantum seen in 2020.