Knowledge Hub

The growth of major life sciences companies has started to normalise after a period of significant growth during the height of the pandemic. Weaker revenue growth and capital funding in the face of slowing global economies is shaping a new competitive landscape for the life sciences sector and the need for companies to rethink their real estate strategy.

This report explores the latest life sciences real estate trends and their impact on real estate strategy. It also examines the latest developments in R&D Laboratory and Office portfolios, as well as investment demand.

Key highlights are below:

• Office Portfolios: Most life sciences firms are seeking to keep costs under control and are therefore unwilling to add to their office portfolios. Workplace transformation and efficiency are a major focus.
• R&D Laboratory Portfolios: As of the end of 2022, there was more than 100 million sq. ft. of R&D laboratory space in Asia Pacific. Solid leasing demand is driving the emergence of new life science hubs.
• Life Sciences Real Estate Investment: Investment demand remains upbeat, with US$18 billion of funds raised for Asia Pacific life sciences real estate in the past five years. However, a shortage of assets for sale meant just US$717 million of direct investment was recorded in 2022.

This report was originally published in https://www.cbre.com/insights/reports/2023-asia-pacific-life-sciences-real-estate-trends

Released in December 2022, the Hong Kong Innovation & Technology Development Blueprint maps out the overall direction and key strategies for the city’s I&T development over the next five to 10 years with the objective of making the city more competitive and diversifying its sectors. This research paper provides the first in-depth review of the strategic plan towards developing Hong Kong into a world-leading hub for I&T and how it will bring valuable opportunities to the I&T sector and the city’s future development.

This report was originally published in https://www.colliers.com/en-hk/research/hong-kongs-i-and-t-future-and-its-property-implications

The office sector has shifted and while asset owners need to adjust so too do flexible workspace operators, otherwise flexible workspace operators, who were once seen as disruptors to the office market, will themselves be disrupted.

Shifting occupier profiles are leading to white space opportunities. We have seen an uptick in demand for enterprise solutions and turnkey offices. We believe this presents an opportunity for a managed suite product, which is a product yet to become mainstream in many Asia Pacific markets. The question is: who is best placed to deliver this?

Meanwhile, asset owners are aiming to placemake with holistic, integrated, hospitality-led amenity stacks to elevate the occupier experience. Is this an opportunity for a new type of operator?

This is an incredibly exciting time, with occupier trends driving innovation in how the market delivers the workplace of the future. This may be the dawn of Office 2.0; at the very least, it is the dawn of Flex 2.0.

This report was originally published in https://www.knightfrank.com/research/report-library/the-flexible-workspace-outlook-report-2023-2023-10012.aspx

Amid the current challenging times for the global economy, the Asia Pacific region remains a bright spot. This is in part due to new and compelling opportunities for investors, especially in asset classes that go beyond the traditional sectors of residential, commercial, and retail.

This issue of Knowledge Brief explores the case for investing in niche and emerging sectors, which have been outperforming traditional asset classes. These include multifamily housing, flexible office space, senior living, healthcare and life sciences, renewables, modern industrial parks, warehousing, data centres, and more.

What are the trends and opportunities in the regional investment landscape? How has technology, as well as changing lifestyles and working practices, caused investors to rethink their strategies?

The articles in this volume discuss how opportunities abound in the real assets industry, with robust prospects for the Asia Pacific.

The Wealth Report is Knight Frank’s flagship annual publication, offering a unique perspective on global wealth, prime property and investment.

Now in its 17th edition, this year’s Report provides a detailed analysis on economic performance, wealth creation and asset classes around the globe, as well as our forecast for commercial and residential real estate the world over.

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

Tenant enquiries and site visits rose during the surveyed period. In Hong Kong SAR, the border re-opening and relaxation of anti-pandemic measures led to more enquiries and inspections.

Expansionary demand grew across all sectors, led by retail and industrial. Hong Kong SAR registered a rise in demand for more space, while India continued to see robust new set up and expansion activity.

Incentives weakened across the region in February, particularly in Australia and Korea. Rents continued to recover, led by Korea and India.

Sentiment in most markets improved along with the recovery of expansionary demand. While Asia Pacific remains a tenants’ market, landlords’ negotiation power is increasing.

This report was originally published in https://www.cbre.com/insights/briefs/Asia-Pacific-Leasing-Market-Sentiment-Index-March-2023

Interest in the logistics sector has persisted over the past half-year, and both development and transaction activity have remained strong. That said, the market appears to be entering a period of transition, and there are some concerns that the previously tight balance between demand and supply has already started to loosen.

Although vacancies in Greater Tokyo and Greater Osaka remain moderate overall, average rents experienced a contraction over the past half-year. Furthermore, some existing facilities are reportedly struggling with vacancies, and pre-leasing activity has been sluggish in several new developments.

Indeed, a wave of new supply is forecast over the next few years in both submarkets, and competition for tenants will increase, which is likely to contribute to some upward vacancy movement and revisions in rents. Meanwhile, structural factors also look set to affect confidence in the logistics sector. The ongoing labour shortage continues to increase labour costs for logistics companies, while the increase in construction costs and interest rates are forcing some investors to reconsider acquiring land for development as well as logistics facilities for the meantime.

Nonetheless, the fundamentals in the sector are still strong, and tenant demand will likely persist due to the strong growth potential of the e-commerce industry. Hence, the outlook should remain positive overall for the logistics market going forward.

This report was originally published in https://www.savills.co.jp/research_articles/167577/210564-0

With e-commerce penetration moderating and the growth in online sales normalising, at the same time consumers are returning to physical retail stores in great numbers, boosting footfall across many markets in Asia Pacific. Our research finds that an overwhelming majority of consumers in the region still choose to purchase goods using a range of different physical and digital touchpoints, otherwise known as omnichannel.

This Viewpoint identifies the factors driving the return to brick-and-mortar retail and explains how operators of physical stores can adapt and evolve to ensure they stay relevant in the omnichannel world.

While evidence shows that physical stores will remain at the forefront of sales strategies, CBRE believes their role must adapt and evolve to serve omnichannel retail. This evolution will see retail stores shift away from being locations purely where transactions are made, towards becoming hubs that provide comprehensive customer experiences. Investors and landlords must also adjust their strategies to suit changing consumer behaviours and retailers’ preferences.

This report was originally published in https://www.cbre.com/insights/viewpoints/optimising-brick-and-mortar-stores-to-serve-omnichannel-retail

Nearly six years after CBRE brought to the fore the aspirations of the millennial generation in terms of how they live, work and spend their money, we went back to the drawing board to track how each generation has evolved since then. Our Live-Work-Shop survey, conducted late last year, polled more than 20,000 people worldwide, from Gen Z to baby boomers. The aim again was to understand how they will live, work and shop in the future, and how the shifting dynamics would impact the real estate they use.

The survey featured around 1,500 respondents from India, and its findings revealed fresh insights for real estate occupiers, developers and investors. We believe these stakeholders can harness our survey findings to make informed decisions and strategies to ensure that our real estate spaces are positioned to meet users’ evolving needs.

This report was originally published in https://www.cbre.com/insights/local-response/voices-from-india-how-will-people-live-work-and-shop-in-the-future