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Fractional ownership is a co-ownership framework wherein the retail investor can invest in smaller fractions of the property with relatively smaller amounts.

With Securities and Exchange Board of India (SEBI) formulating detailed guidelines for Small and Medium REITs (SM-REITs), a large number of erstwhile unregistered Fractional Ownership Platforms (FOPs) for real estate assets are expected to get listed as SM REITs. This will effectively have the potential to regularize underlying real estate assets to the tune of over INR 40 billion in the near to midterm.

Key highlights of the report include:

• In the office market, strata sale form of fractional ownership constitute 28% of total Grade A stock with over 200 mn sq ft of Grade A strata sale stock across the top six cities.
• Strata sale office stock in top six cities in India will swell to 260-270 mn sq ft in next two years, with an estimated market value of around INR 4,500 bn.
• A well-regulated market of fractional ownership will attract investors across various asset classes and diversify in alternative asset classes like industrial & warehousing, data centres, retail etc.

Business leaders are currently dealing with the crucial question – how can they effectively optimise resources, maximise savings and drive growth as they navigate a dynamic business landscape in 2024. Their challenges remain compounded by unprecedented inflation, fierce competition for talent, and the rising pressures of digitalisation and climate action.

Amid this scenario, offices today, albeit with much higher workforce flexibility, remain the epicentre of the work culture, with relocation decisions being underpinned by talent strategy and ESG goals. In Asia Pacific, a much greater pull to the office is creating higher occupancy than witnessed in other markets globally – causing the continued upward pressure on office rentals across the region.

In this edition of our Expert Insights | Asia Pacific Office Markets April 2024, we highlight six priorities to achieve cost savings in office real estate. We also present the Colliers Q1 2024 Office Market Research Reports from key Asia Pacific markets, unearthing actionable insights for real estate leaders.

Key Takeaways

• The data center market grew to new highs in 2023, with over 30GW encompassed in this report, including a more complete coverage of both colocation and hyperscale self-build inventory over last year’s edition.
• Power became a paramount concern, with the increasingly limited availability of large blocks of power across major markets.
• These power limitations have pushed data center operators to further evaluate untapped and smaller markets worldwide.
• Artificial intelligence proves to substantially grow demand worldwide, altering both site selection strategy and data center design.
• Despite challenges with power availability, larger markets have maintained momentum with their pipelines, through growing outlying submarkets

CBRE’s survey of more than 120 retail leasing market professionals in Asia Pacific reveals that retailers’ expansionary demand remains strong as they seek to revitalise their store networks post-pandemic.

Key findings include:

• 76% of retail brokers reported leasing enquiries for new setups, expansion and upgrading, indicating appetite for more space.
• More than two-thirds reported an increase in leasing enquiries and site inspections in Q1 2024, indicating that regional leasing activity is likely to remain strong in the coming months.
• As vacancy in prime areas contracts further, half of the respondents – the highest proportion since 2023 – expressed the view that retail leasing market dynamics are shifting in favour of landlords.
• Positive retail leasing sentiment across all Asia Pacific markets, with the strongest improvement observed in Japan.
• Retailers across Asia Pacific are displaying a very strong preference for prime core retail space.
• Most retailers plan to retain or increase their real estate budget and store footprint in 2024.
• Amid a global shift in consumer spending towards eating out and experiences, F&B remains the most active retail trade in Asia Pacific, with demand the strongest in Singapore and Southeast Asia.

This report was originally published in https://www.cbre.com/insights/briefs/asia-pacific-retail-leasing-sentiment-survey

There were two major factors affecting the Asian real estate market in the past few years, namely COVID-19 pandemic and interest rate hikes.

COVID-19 is no longer considered a public health emergency of international concern while stable or slightly lower interest rates from the Federal Reserve in 2024 is anticipated by many Asian markets. This is expected to increase the appetite for property investment over the next 12-24 months.

Key highlights in the Report:

Office Sector

• Investors are seeking more stable revenue streams and longer-term capital gains in Asia markets.
• There is an oversupply of office space in Bangkok, Beijing, Jakarta and Shanghai; and it will take time for the market to absorb.
• Rental levels in Bangkok and Beijing are under pressure while office rent in Seoul is rising due to limited new supply.

Retail Sector

• High street and prime retail malls in different markets have faced challenges during the pandemic, with the exception of district retail centres offering daily necessities for the neighourhood.
• High inflation in many Asian markets has impacted overall consumption.

Industrial Sector

• There is an oversupply of industrial space in Beijing, Seoul and Shanghai, making the industrial sector in these markets buyer and occupier’s market.
• Jakarta is expected to have a steady performance in the industrial sector driven by the electronic automotive industry.
• Bengaluru, Hong Kong and Mumbai have stable demand for logistics, warehouses and data centres.

This report was originally published in https://www.colliers.com/en-xa/research/2019-to-2023-apac-cap-rates-report

The Wealth Report’s unique data, expert insights, thought-provoking interviews and future views help shed light on the key issues affecting how you live, work, invest and give back.

In brief:

• Private capital is critical for real estate investment, representing a record 49% of all commercial transactions in 2023.
• With wealth creation turning positive again, the choices of UHNWIs will have a growing influence on real estate outcomes.
• 22% of wealthy individuals want to invest in residential property this year, and 19% in commercial property.
• The need for private capital to aid the repurposing and upgrading of global property have never been higher.

This report was originally published in https://www.knightfrank.com/wealthreport

Despite a challenging economic environment, data centres remain in focus for the commercial real estate industry in Asia Pacific, with notable market developments across the region.

CBRE’s latest Asia Pacific report explores key data centre investment trends and outlook for the sector in the region, and offers insights into the data centre occupier and investment market in Australia, Hong Kong SAR, Japan, Singapore, India and Korea.

Key regional trends include:

• Investor demand for data centres is strong, with a wide range of buyers seeking stabilised assets. However, there remains a lack of stock for sale.
• Prevailing high interest rates continue to weigh on data centre investment. However, investment volume in 2024 is expected to recover from last year’s low base, driven by activity in Japan.
• In addition to increased activity by hyperscalers and more corporates moving towards a co-location approach, there has been a surge in AI-related demand since late 2023.
• Power supply, especially a lack of renewable energy, is becoming a major challenge for future data centre development. 

This report was originally published in https://www.cbre.com/insights/reports/asia-pacific-data-centre-trends-q1-2024