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Asia Pacific Economy Forecast to Return to World-Leading Growth in 2022 with India Leading the Recovery

Awantika Mohanty • 20/12/2021

India is forecast to lead the pack within the Asia Pacific region with growth averaging over 9% for the year 2022.

India’s largest markets, led by tech-cities such as Bengaluru and Hyderabad, to experience heightened demand.
72% of employees in India show the desire to attend office frequently - more than two days a week: 12% points higher than APAC and 45% points higher than US.

New Delhi, Dec 7, 2021 – Cushman & Wakefield released a report titled ‘Catch ’22 - Asia Pacific Commercial Real Estate Outlook 2022’. According to the report, the Asia Pacific economy is set to rebound in 2022 with India expected to lead regional growth. In terms of real GDP growth by market, India is set to surpass Japan, South Korea, Singapore and Australia in 2022.

Asia Pacific economy forecast

Source: Moody’s; Cushman & Wakefield

Anshul Jain, Managing Director, India & South East Asia commented, “We expect 2022 to be the year of growth and resurgence that will be led by the high office demand across Asia Pacific. Momentum around e- commerce, logistics, data centers and sustainability will add tailwinds to this growth.”

Office Outlook

The Asia Pacific office market showed remarkable resilience by recording consecutive quarters of positive net absorption since the onset of the pandemic. Office demand, as measured through net absorption, is expected to pick up across all markets in 2022, as occupiers increasingly make decisions around their corporate footprints. India’s largest cities especially are forecast to experience increased demand as a result of delayed decision making by Occupiers in 2021.

As economies reopen and employees start their return to the office, it is important to note that while there is generally a universal desire to work with greater flexibility post-pandemic, significant variations exist across the Asia Pacific region. Employees in India and China show desire to work frequently in office (i.e. more than two days per week). India at 72% is 12% points above Asia Pacific average and 45% points above United States.

Office Attendance Post Covid

Badal Yagnik, Managing Director, Tenant Representation, India, commented, “In 2022, India is bound to get the front seat in APAC real estate growth, ahead of China & Australia, driven by strong office demand. The same is reflected in the report where the net absorption forecast for 2022 for Bengaluru is estimated to be equal to that of Beijing at 8Mn SF and Hyderabad won’t be far behind at 7Mn SF.”

Investment Outlook

While the investment market has not been immune to the negative impacts of the pandemic, it has also been comparatively quick to rebound. Given the outlook, and trends to date, total regional investment volume in 2022 is expected to remain at 2019 peak of around USD 180 bn. The investment market in India continues to grow and mature with the REIT market now owning 10% of Grade A stock. These growth trajectories are expected to continue into 2022.

Retail Outlook

The retail and leisure/tourism sectors have been hardest hit during the pandemic but there are few signs of distress. The strength of rebound in domestic consumption and tourism flows will determine the outlook for discretionary expenditure and the likelihood for further repricing or the onset of distress. However, this should not be the sole indicator for investment as several markets across the region, including China, India and South East Asia, remain under-served by physical retail space and so longer-term opportunities in these markets should not be ignored.

Note: For more insights, please refer to Cushman & Wakefield’s Catch ‘22: Asia Pacific Commercial Real Estate Outlook 2022.

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