The majority of Asian investors may have been unprepared for the economic impact of COVID-19 but should now be able to find some solace in the long-term opportunities emerging within certain Asia Pacific property markets, Colliers International says.

The global real estate firm released its Asia Pacific Market Snapshot Q1 2020 report this week, examining the prior quarter’s property market performance in 19 Asia Pacific markets while also providing forecasts for the quarter ahead. 

Colliers International Managing Director for Asian Capital Markets, Terence Tang, told WILLIAMS MEDIA investors would always look to markets with "attractive governance".

"In this current environment, markets with a responsive government that are introducing economic stimulus packages will continue to show attractive long-term growth potential," he said.

"At present, across various markets, technology-related assets are well-positioned to navigate the immediate headwinds of the current economic downturn.”

Colliers International Managing Director for Asian Capital Markets, Terence Tang. Source: Colliers International

Singapore opportunities expected to emerge in the logistics and premium office sectors 

According to Colliers, the city-state’s residential sector performed relatively well in the first quarter, but an unpredictable economic outlook could limit home sales and new projects.

A slowdown is also expected in the commercial sector as remote working measures gather pace to contain the virus.

However, opportunities are expected to emerge in the logistics, premium office building, hotel segments and CBD residential.

 Colliers International  Asia Pacific Market Snapshot Q1 2020 - At a glance:

• Singapore property markets see the emergence of promising segments where great investment opportunities could come up such as logistics properties, quality office buildings, CBD residential and hotels
• Government policies to help Chinese markets recover from the coronavirus outbreak
• Property markets in Hong Kong and Singapore offer value-buying opportunities for long-term investors amid uncertain outlook
• Japan’s logistics segment expected to benefit; office segment retains appeal; hotel and retail sectors hit hard by the virus, but
• Seoul’s office sector performed well, but a prolonging of the virus outbreak could hurt sentiment
• Resilient property markets in Australia and New Zealand face a temporary slowdown

Chinese cities see development and fast-tracking for growth 

Several policy initiatives have been introduced by national and local governments to support China’s property markets, including facilitating cash flows to developers in Guangzhou and Shenzhen; promoting the simultaneous development of districts and counties surrounding Beijing; and fast-tracking the growth of Shanghai as a global financial hub. 

China, as one of the first markets in the region to be affected by the virus outbreak, is now gradually returning to normal. 

Japanese logistics sector sees e-commerce expansion 

The report indicates that Japan’s hospitality and retail property markets bore the brunt of the pandemic’s impact in the first quarter.

However, Tokyo’s office sector, where pre-commitments for 2020  account for 85 per cent of supply, held firm, and the logistics segment is expected to perform  well as virus containment measures lead to growth in e-commerce. 

Offices and industrial conversion opportunities showing appeal in Hong Kong 

Investors in Hong Kong’s property market, beset by a succession of challenges – from last year’s protests and the US-China trade dispute to the coronavirus outbreak – remained understandably wary in the first quarter, according to Colliers.

Despite this, long-term investors should find attractive opportunities with capital values expected to decline over the next quarter across several sectors, with offices and industrial conversion opportunities showing appeal and hotels for rebound uplift. 

Seoul office sector going strong 

The report revealed the South Korean capital saw office transactions worth nearly USD2 billion close in the first quarter, helped by votes of confidence from big-name foreign investors such as KKR.

Colliers expects the city's office sector should remain upbeat with further deals expected throughout 2020 unless a prolonging of the virus outbreak affects sentiment. 

Click here to download the report.

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