Residential buildings held in unified ownership with units to be separately let could characterise the multifamily sector within Asia Pacific markets going forward, new research has found.

According to JLL, multifamily (build-to-rent) investments in Asia Pacific totaled US$6.7 billion in the first half of 2020, approaching the volumes recorded in full year 2019, as investors seek defensive assets and shift towards structural capital deployment strategies.

JLL Head of Capital Markets Research Regina Lim said the sharp increase observed in the first half was attributable to recent cross-border portfolio deals in Japan, including strategic deployments by Blackstone, adding that while the Japan multifamily sector currently accounted for over 95 per cent of available multifamily stock in Asia Pacific, JLL estimated that with a sharp pick up in new supply in China and Australia, the proportion would likely decline to 85 per cent in 2023.

“Asia Pacific’s multifamily sector has solidified its status as a structural play for global investors,” he said.

“Investors understand that multifamily demand will be driven by both demographic shifts and institutional support, which will ensure that fundraising will further accelerate in traditional markets like Japan and emerging renting markets like China, Australia and Korea.”

Source: JLL 

According to JLL Research, multifamily investments have accelerated throughout the COVID-19 crisis due to growing appetite for defensive assets.

Ms Lim said multifamily fundraising is set to further accelerate beyond 2020, underpinned by a variety of structural influences.

“The multifamily space is poised to evolve rapidly, led by changing societal attitudes to renting in markets like China and Australia," she said.

Source: JLL 

"We expect ongoing government policy changes to further support renters, demonstrated recently by China’s policies to create 750,000 rental apartments and Australia’s amendment of tax laws to facilitate new projects.

"There is room for yield compression in Asia as the market matures. In other cities outside Asia, multi-family yields are already below office yields."

Click here to view the full JLL report.

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