Trade tension between the US and China will remain regardless of the election result, but a win for Joe Biden could improve business confidence in real estate markets across the Asia Pacific region, Colliers International says.

With no clear winner as yet, the immediate future of the US and what it means for APAC markets hangs in the balance, with the candidates offering two distinct paths forward for the country.

In A Tale of Two Outcomes: The US Election and Implications for Global Real Estate, Colliers International notes the U.S.-China trade war would probably escalate again under Trump, whereas Biden could oversee an easing of tensions over time, given he would consider lifting tariffs in exchange for cooperation on climate change – a policy agenda that China shares. 

Source: Colliers International

According to the report, while an escalation of the U.S.-China trade war would hit foreign business confidence in China and Hong Kong, the tangible impact on China’s economic growth would probably be limited (given the country’s strong economic  rebound from the COVID-19 recession), and a renewal of the trade war would have less impact on other APAC markets.

Colliers believes a Biden victory might improve business confidence in markets  across the region, including China, in the long run.

Asia Head of Research Andrew Haskins the importance of energy efficiency and sustainability was expected to rise in all aspects of property occupation and investment.

"If a Biden victory accelerates global progress on climate change, the incentive for developers to adopt high 'green' standards and certifications will increase," he said.

"This may result in near-term retrofitting costs for owners of existing buildings.

Colliers International Asia Head of Research Andrew Haskins. Source: Colliers International

"However, investors are likely to assign a premium to buildings with such standards.

"While data centres are a very popular asset class in APAC due to surging data usage, from a sustainability perspective reducing their power consumption represents a long-run challenge. 

Mr Haskins said the election result would also likely carry implications for Multinational Corporations’ (MNCs) presence in greater  China and other APAC markets 

"The further adoption of 'reshoring' or  'China + 1' strategies by multi-national companies after a Trump victory would boost demand for office space and industrial property in countries such as Japan, India, Vietnam, and Taiwan," he said.

"If Biden wins, demand not only from local enterprises but also foreign MNCs should continue to drive take-up of office and industrial space in China,  especially around the Tier 1 cities.

"Prospects for Hong Kong would also improve."

Click here to download the report.

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