Stories

In July we held our Reclaim 2020: H2 Insights webinar in which our panel of experts explored the state of the real estate market across Asia Pacific and the green shoots of opportunity that have started appearing after a challenging first half of the year.

In this July 2020 report, we take a look at the latest updates from the office, retail, hospitality and logistics sectors in the Philippines. 

With 97 million young tech savvy population, Vietnam compared with its peers remains still one of the most competitive on labour cost and land lease, construction cost.

Office prices in Singapore continued to decline in Q2 2020, marking the fourth consecutive fall in office prices since Q3 2019. Meanwhile, Central Region retail prices and rents fell by 1.5% qoq and 3.5% qoq respectively in Q2 2020, reflecting the disruption of COVID-19 on tenant sales and footfalls.

Private residential prices in Singapore rose by 0.3% qoq in Q2 2020, differing from earlier flash estimates of -1.1% qoq. The change in trend can be attributed to increased sales activity post circuit breaker in June, after two consecutive months of muted sales in April and May. 

This report will examine the performance of commercial assets acquired during previous recessions and detail the capital gains subsequently enjoyed by the investors.

As corporates limit non-critical expenditure, capital expenditure budgets have been frozen over the near term. When capital projects are reinstated expect to see a focus on flexibility. The ability to change up spaces quickly is paramount, evolving the plug and play approach.

Corporates will need to align financial goals with their real estate strategy and HR policies to successfully deploy agile working practices to help shrink their corporate footprint. This is not a quick or easy task. Expect the implications of lower demand to continue to play out in 2021 and beyond.

Assets values have come under close scrutiny as the impacts of the pandemic have been felt. While pricing has been resilient so far, there is evident weakness in the retail and hospitality sectors.

Post-pandemic, commercial tenants are focussed on two central goals: cost management and forward planning. What is clear is that with an uncertain future ahead, the need for flexibility and tightly controlled capital expenditure is paramount.

The industrial sector has largely proved resilient through the pandemic so far. While manufacturing has been most disrupted, growth has been evident in logistics, warehousing and cold storage. Tenants associated with bio-medical and pharmaceutical sectors are expected to lead demand over the medium term.