APAC property investment volumes to increase by a third in 2022

Private equity investors’ interest in offices will drive investment demand.

Real estate investment volumes in Asia Pacific are expected to grow by a third in 2022, according to Knight Frank’s 2021 Active Capital Report. 

Investment demand will mostly come from US investment managers and private equity interest in offices. Apart from the US, Singapore, Canada, UK and Germany are slated to become APAC’s top sources of capital. 

In total, Knight Frank says the APAC office sector is forecast to attract over half of inbound investment into the region, the most popular locations being Greater China, Japan and Australia. Industrial will be the second most invested sector in 2022. Despite the challenges, retail will remain third for investments in the region.

For outbound investment, the US will be the favoured destination for APAC buyers, driven by the opportunity for scale across sectors. For example, Singaporean Government-linked companies acquiring platforms in the multifamily and data centre sectors.

There is also predicted to be a big increase in Asia-Pacific capital deployed into the UK as borders re-open and business travel can resume. Offices in the UK and gateway cities in Europe will remain in strong demand, as will pan-European logistics.

Neil Brookes, Head of Global Capital Markets at Knight Frank, commented: “The results from this year’s report are welcome sign of the continuing recovery in the region, linked to the resurgence of global cross-border investment into real estate.

“Indeed, as the world moves into the next phase of living with the pandemic, we could see a roaring 20’s effect for real estate in 2022.

“Thanks to the latest AI and machine learning technology, this year we have a much deeper dive on the likely trends emerging on where, what and how capital will be invested in the year ahead. As such, it provides a timely and actionable set of insights to help investors navigate the post-pandemic global real estate market, allowing them to stay one step ahead.”