Login
iscover
Across the Asia Pacific, post-COVID-19 recovery is set to continue into the next financial year – but some assets will perform better than others.
A new report from DWS Real Estate has uncovered the top trends set to shape the commercial property landscape in key Asia-Pacific markets over the coming 12 months.
While office leases are set to remain “bleak” in China and Hong Kong over the next year, other markets are experiencing a strong recovery.
In Tokyo, Singapore and Seoul, leasing volumes and office rents saw a steady rise, with prime-grade assets proving particularly popular.
Australia’s office market performed less strongly, with vacancy rising to 12 per cent in Sydney and 16 per cent in Melbourne in FY24, but upcoming repricing may ease financial conditions by the end of this year.
The retail sector has also seen weak performance across APAC, with reduced discretionary spending in Australia weighing on retail leasing.
DWS Real Estate stated: “We believe that while the retail sector could present selective opportunities for recovery in rents and occupancy, structural and cyclical factors including rising ecommerce, higher cost-of-living and rising operational costs for retailers could constrain rental growth prospects.”
When it comes to the industrial sector, however, growth has been more resilient.
While the strong post-COVID-19 momentum is softening, the warehousing market in both Australia and the wider APAC region remains robust, with the national Australian vacancy rate for prime logistics sitting at just 1 per cent.
Going forward, all eyes will be on Australia’s build-to-rent (BTR) sector, with DWS Real Estate noting the housing model “has gained traction among institutional investors”.
Strong population growth, housing shortages, and favourable affordability conditions will continue to make BTR developments attractive to APAC investors.
“Recent revisions to legislation have introduced tax concessions for new residential BTR projects, further opening up the sector for foreign investors,” the company said.
“While the current BTR stock in Australia is still relatively small, the development potential remains significant, and careful market selection and partnering with experienced local partners can help mitigate the risks associated with this asset class.”
Alternative assets, including data centres, senior housing, and purpose-built student accommodation, were also named as areas to watch going into FY25.
Never miss a beat with 
Stay across what’s happening in the Australian commercial property market by signing up to receive industry-specific news and policy alerts, agency updates, and insights from reb.
Subscribe to reb Commercial:
