Why APAC investors favour assets with tech tenants

Taiwan, Singapore, and Australia saw a spike in business park transactions in Q1.

A recent report by CBRE reveals that Asia Pacific commercial real estate investment sales totaled US$26 billion in Q1 2021, an increase of 12% y-o-y. Investment sentiment continued to strengthen over the quarter, with many markets reporting higher enquiry levels. 

Logistics remains the hottest asset class, with yields continuing to compress across most markets. According to CBRE, business and high-tech parks catering to tech tenants continue to be another area of interest for investors, especially in Mainland China and Singapore, underpinned by the resilience of tech companies throughout the pandemic.

Retail is gaining interest as a counter-cyclical play, with strong domestic tourism consumption in Mainland China, falling capital values in Hong Kong, and a rebound in J-REIT prices in Japan attracting capital to the sector. Investors are also considering the hotel sector for repositioning opportunities.

“Overall purchasing appetite for commercial property assets is strong, led by private investors. Funds are also actively reviewing acquisition and disposal opportunities, buoyed by current liquidity and pricing levels ahead of upcoming fund expiries,” said Dr. Henry Chin, Global Head of Investor Thought Leadership and APAC Head of Research for CBRE.

“Non-core assets and businesses will continue to be disposed in the coming months as corporates recycle and repatriate capital to reduce debt. We expect Asia Pacific investment volume to increase by 10% in 2021, driven by purchasing activity and disposals, led by funds and developers,” he added. 

Read the full report here.