Despite these uncertainties, the Asian real estate market is expected to grow more quickly in 2022.
JLL, a global real estate consultant, anticipates that investment volumes in 2022 will be close to $200 billion, or over 15% more than the $162–169 billion full-year forecast for 2021. This prediction is made despite the fact that the societal and economic effects of COVID-19 remain uncertain.
According to JLL, in 2022 several themes will fuel heightened investment activity and support ongoing recovery in leasing across asset classes, including a stronger office market, high demand for modern logistics facilities, and the continued growth of alternative sectors such as data centers and life sciences.
According to Anthony Couse, Chief Executive Officer, Asia Pacific, JLL, “Asia Pacific’s real estate markets will be stronger in 2022, as investors maintain their bullishness and leasing activity continues to further recover.”
“Although it is obvious that there will be no straight road to economic recovery, our clients seem optimistic about the future of office-based work. Though uncertainty still exists and will be taken into consideration this year, investor sentiment is positive.”
According to JLL, investors will continue to target real estate throughout 2022, increasing their investments in opportunistic ventures in countries like China and Japan.
6.9 million sqm will be added to the office market in Asia Pacific in 2022, an increase of 13% from the previous year. According to JLL, this year’s net absorption levels will increase by 20% as a result of the growth of financial, technological, and flexible space operators.
The fastest annual growth rate on record is expected to be achieved by prime logistics stock between 2021 and 2022 when 20.8 million sqm of new supply is anticipated to be delivered. JLL predicts that by 2025, annual logistics investment will reach $60 billion as a result of rising stock and portfolio reallocations.
As confidence in the hospitality industry grows, hotel investments are also anticipated to increase by up to 30% in 2022 and surpass $9 billion.
The demand for data centers from investors and tenants will increase in 2022. By 2026, the hyperscale cloud market will have grown from $37 billion to $179 billion, a 400% increase that will continue to drive demand for real estate.
Even though the life science industry continues to be a niche for some Asia Pacific investors, the region will still present a variety of opportunities in terms of location and asset class in 2022 as occupier demand increases.
“In 2021, the Asia Pacific real estate market was confronted with never-before-seen difficulties. While there will be some risks in 2022, long-term investors are still confident in the secular trends—ongoing urbanization, rising prosperity and a growing middle class, and the acceleration of e-commerce—that will drive demand in this region. All of these indicate potential investment opportunities “Roddy Allan, Chief Research Officer for JLL’s Asia Pacific region, says.