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Despite rapid growth in inbound demand in recent years driven by a sharp increase in overseas visitors, Japan’s retail and hotel markets remain overwhelmingly driven by domestic demand.

Therefore, while a recovery in inbound tourism is still some time away, Japan can be said to have rapid recovery potential, should domestic demand return.

CBRE believes the return of domestic demand is imminent, with pent-up demand steadily accumulating due to restrained consumption and various benefits and incentives provided by the government. 

This demand is likely to materialise in the form of consumption for higher-end goods and services, trends that auger well for Japan’s retail and hotel sectors, especially the higher-end segments.

This article was originally published in https://www.cbre.com/

H 1 2021 transaction volumes were close to the six monthly average observed over the past five years

Office and industrial sales lead the New Zealand market The top three largest sales above 100 million were office assets

Vacant land/development sites show a lift in sales volumes

Singapore based investors were the most active of the offshore groups, with a smaller proportion of investment by Malaysian and Australian buyers

Investment activity is dominated by private buyers 52 followed by institutions 34 and syndicates 7 However, privates are net sellers, while institutions and syndicates are net buyers

This article was originally published in https://www.cbre.com/

• Compared with an average of over 3,500 units launched over the last three quarters, developers slowed down and launched a total of 2,356 private residential units in Q2/2021.
• With fewer new launches, the total new sales volume fell 15.1% quarter-on-quarter (QoQ) to 2,966 units in Q2/2021.
• The sales momentum in the secondary market continued to pick up in Q2, with total resale volume rising by 19.0% QoQ to a new record high of 5,483 units.
• The Urban Redevelopment Authority’s (URA) property price index of residential properties rose by 0.8% QoQ in Q2, slowing down from the 3.3% QoQ increase in Q1. This was largely because prices of landed homes ended their short-lived growth with a 0.3% QoQ decline, while non-landed homes saw a slower increase of 1.1% QoQ in Q2.
• The average prices of Savills’ basket of high-end non-landed private residential projects also saw a moderated increase of 0.4% QoQ to S$2,434 per sq ft in Q2.
• Unless there is serious contagion arising from China Evergrande, prices are expected to rise by 5.5% year-on-year (YoY) in 2021 with another 5% in 2022.

This article was originally published in https://www.savills.com/

As residential prices increase across the world, so too do transaction volumes. Commercial residential transactions for multifamily increased to the largest sector by investment volumes, at 28% of all transactions, overtaking offices for the first time in the first half of 2021. End-user residential also returned to pre-pandemic transaction levels nearly as soon as property markets reopened. The strength of residential property markets shows that home isn’t just where the heart is. 

Global real estate investment underwent a major shift in the first half of 2021 as the multifamily residential sector overtook offices to become the largest sector globally for the first time since records began in 2007, when considering deals over $2.5 million. Over the first six months of 2021, $136 billion was invested in residential, 35% higher than the same period in 2020 and 4.1% higher than office transaction volumes. Growth was driven by the global interest in the strong fundamentals for the residential sector. Many locations remain severely undersupplied for appropriate housing, particularly to meet the demand from younger people moving to urban centres.

In the end-user residential market, there were converging factors driving increased transaction volumes in many locations. From the race for space to the shift to working from home, many buyers globally decided that their current homes weren’t working for them. As soon as they were able, buyers made the choice to move to new properties, assisted by record low interest rates and government support for property markets. Across the 15 cities analysed for this article, 80% of the locations have seen transaction volumes above 2019 figures. 

A significant number of properties that transacted were purchased by mortgaged homeowners as price growth squeezed out first-time buyers while boosting the buying power of current owners. Roughly 45% of UK new buyers put their plans to buy on hold in 2020, as Covid-19 landed a double blow of rising house prices and constrained personal finances. The number of first home buyers taking out new home loans in Australia dropped to its lowest level in eight months in June 2021 to 13,869, though the number of home loans for all owner-occupiers fell in June as well, as Australia battles a new wave of Covid-19. 

This article was originally published in https://www.savills.com/

Will electric vehicles change the automotive world?

Electric vehicles (EVs) are steadily weaving their way into the fabric of our transportation. According to the International Energy Agency (IEA), over 10 million electric cars can now be found on the roads of the world; with over 125 million expected by 2030. Between 2010 and 2020, the cost of batteries has plummeted to close to a tenth of their original price and could halve again by 2030, only accelerating the adoption of the EV.

This article was originally published in https://www.savills.com/

Providing affordable and interesting workspaces is crucial to ensuring that cities are at the forefront of the tech and creative industries, and therefore a draw for national and international talent.

Cheaper fringe offices have historically helped generate economic growth and jobs, providing space for entrepreneurs and creatives in the early stages of their businesses. However, the first rung on the property ladder for many start-ups has now been removed as costs have escalated in most key global cities over the years. The Covid-19 pandemic has also normalised home-working in many locations, meaning that start-ups, creatives and entrepreneurs need incentives to return to cities.

This is not just an issue for the businesses looking for affordable space: cities across the world  benefit from the activity and vibrancy that start-ups, the arts and social enterprise tenants have brought into areas that were once dilapidated and un-loved. However, these are often the first to be pushed out by increasing rents, as developers, investors and higher-paying occupiers become attracted by the very vibrancy that these tenants have helped to build. 

Cities that have succeeded in attracting and maintaining creative talent often have lower office costs. Berlin for example has thrived due to its cheap rents (despite fast rent increases, Berlin remains on average 30% lower than London or New York), creative atmosphere, and support system for local artists. The creative sector now accounts for 10% of Berlin’s economy, having created about 67,000 jobs since 2009.  

This article was originally published in https://www.savills.com/

The value of all the world’s real estate reached $326.5 trillion in 2020, a 5% increase on 2019 levels and a record high.  Growth was driven by residential which is by far the largest real estate sector, accounting for 79% of all global real estate value.  It saw its value increase by 8% over the year, to some $258.5 trillion.

The world’s most significant store of wealth, real estate is more valuable than all global equities and debt securities combined, and almost four times that of global GDP.  The value of all gold ever mined pales by comparison at $12.1 trillion, at just 4% the value of global property.

This article was originally published in https://www.savills.com/

Tenant enquiries were unchanged but site visits fell following the reintroduction of COVID-19 controls, particularly in Australia, Southeast Asia, and Japan.

Flexible space demand continued on a downward trend, but requirements for traditional office space increased.  

Rents improved this month, mainly driven by mainland China, Singapore and India. The period saw stronger pressure to increase incentives, particularly in mainland China and India.

Sentiment in most markets strengthened or remained stable, with mainland China and India among the strongest performers.

This article was originally published in https://www.cbre.com/

Although multifamily has been regarded as an institutional grade asset class in the U.S. and Europe for some time, Asia Pacific’s strong culture of home ownership has resulted in a relatively small investible universe.

Japan has been the lone exception, with the country’s large, liquid, and resilient multifamily market attracting robust interest from both foreign and domestic investors over the past decade.

More recently, factors such as urbanisation, declining housing affordability and regulatory change have piqued investor interest in multifamily in several other Asia Pacific markets, most notably mainland China and Australia.

This Viewpoint explores the growth drivers behind multifamily investment in Asia Pacific; profiles the region’s established and growing multifamily markets; and explains how investors can access this increasingly attractive sector.

This article was originally published in https://www.cbre.com/

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This article was originally published in https://www.colliers.com/