Corporate real estate disposals in APAC hit a record USD44.4b in 2021
Around 73% of corporate sales activity in the region involved disposals.
Following a steady flow of sales in 2020, a CBRE report says corporates across Asia Pacific increased their real estate disposal activity in 2021.
According to data from CBRE, 762 deals worth a combined total of US$44.4 billion were completed as sellers capitalised on strong pricing to offload assets.
Here’s more from CBRE:
Pandemic accelerates selling activity
While pandemic-related uncertainty led to Asia Pacific commercial real estate investment volume falling by 6.5% y-o-y in 2020, corporate sales activity accelerated by 53% y-o-y over the same period, with strong momentum continuing into 2021.
This was mainly due to the pandemic prompting many corporates to strengthen their balance sheets in response to the significant disruption caused to their businesses by lockdowns and other measures to contain the spread of COVID-19.
Motivation for disposals differs compared to that for sale leasebacks
Around 73% of corporate sales activity in Asia Pacific in 2021 involved disposals (owner vacating). Deals generally saw corporates disposing of older assets that nevertheless commanded strong pricing thanks to upbeat market conditions, with buyers mostly investors undertaking value-add or development/opportunistic strategies.
Sale leaseback deals accounted for the remaining 27% of corporate sales in 2021, with companies adopting this strategy motivated by a need to enhance their balance sheet and reinvest into their core business. The buying parties in sale leaseback transactions were predominantly core funds and institutional investors.