Real estate investment volumes in APAC to fall 5%-10% in 2023

In 2022, volume declined by 25%.

JLL expects Asia-Pacific real estate investment volume to fall 5% to 10% in 2023 due to the “tumultuous economic and financing conditions.”

The expected decline in 2023, however,  is more moderate compared to the 25% drop in 2022.

The moderation is likely because of the re-opening of China’s border. 

Amongst APAC markets, JLL said Hong Kong will benefit most from the re-opening.

JLL expects Hong Kong to record a 10% to 15% growth in the total transaction volume of commercial properties this year.

“Mainland Chinese investors began to return to Hong Kong and look for property investment opportunities after the opening of borders. The investors expect the rental growth, especially on retail properties to outweigh the impact of interest rates hike,” Oscar Chan,
head of Capital Markets at JLL in Hong Kong.

Looking at sectors, JLL expects the hotel industry will benefit most from the border re-opening, adding the hospitality assets will see a 6% increase in 2023.

Other sectors that JLL anticipates investors to look into include data centres, logistics, multifamily and a slew of scheduled greenfield projects in emerging markets including India and Southeast Asia.

Japan, meanwhile, will emerge as the most attractive investment destination due to Yen's weakness coupled with low-interest rates.

“Singapore’s status as a haven and sound property fundamentals will continue to attract capital and Australia’s highly transparent framework and low beta characteristics to draw core investors” added JLL.