Thought Leadership

CBRE’s 2024 Global Investor Intentions Survey reveals buyers’ and sellers’ preferred strategies, markets and property types. Highlights of the report include:

• Global investors expect to engage in more buying and selling activity compared with 2023 amid growing optimism that the real estate investment market conditions will improve.

• Although some further cap rate expansion is expected, this trend should start to reverse by midyear.

• While investors in most markets remain cautious in H1 2024, expected interest rate cuts by midyear should lead to improved commercial real estate investment activity in the second half of the year.

 

This report was originally published in https://www.cbre.com/insights/reports/2024-global-investor-intentions-survey

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Against a volatile economic backdrop, the Asia Pacific office market remains steadfast and continues to grow, with a broadly positive outlook. The need to innovate and evolve has not diminished. Companies are striving to meet their Environmental, Social, and Governance (ESG) targets, and new modes of working embrace flexibility, collaboration, and innovation, while fostering diversity and inclusion. The office is central to many of these transformative processes, with an increasing focus on building quality, fit out design, and raw material selection.

This year’s Guide takes a closer look at 33 key cities across the region, as well as:

• Key considerations for a best-in-class office fit out: creating office value, inclusive and sustainable design and partnership with landlords
• Cost estimates of three different styles of fit outs to cater to the post-pandemic workforce
• A comprehensive fit out cost breakdown that includes furniture, mechanical and electrical works, construction works, IT, audio visual and miscellaneous costs
• Three different levels of reinstatement costs, together with average retrofit costs

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The pandemic spurred a sharp rise in e-commerce, causing global supply chain vulnerabilities that underscored the need for greater resiliency. Third-party logistics (3PL) warehouse operators had to optimise supply chain operations, cut costs and utilise new technologies. 3PLs have been highly effective, now dominating demand for industrial & logistics space, impacting real estate fundamentals and warehouse building design, and leading to further industry evolution such as fourth-party logistics (4PL) and reverse logistics.

3PLs have grown globally:

• Asia-Pacific: 3PLs accounted for 30%-40% of logistics leasing activity in 2023, with marginal growth ahead. This trend is driven by cost-cutting initiatives and a desire for efficiency amid logistics’ increasing complexity.
• United States: 3PL leasing activity accounted for more than 30% of bulk transactions (over 100,000 sq. ft.) since the pandemic’s onset due to significantly higher e-commerce, requiring corresponding warehouse space. Although economic uncertainty has slowed short-term 3PL growth, the long-term outlook is strong. 4PL will drive even more modern warehouse space demand.
• Europe: 3PLs have become a larger part of logistics leasing demand, increasing by 10+ percentage points since 2019. During this time, for XXL facilities (warehouses over 50,000 sq. m. or 580,000 sq. ft.), final occupiers have increasingly preferred to control the lease themselves and contract a 3PL to operate the warehouse.

This report was originally published in https://www.cbre.com/insights/reports/the-global-outsourcing-of-warehousing

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The Asia Pacific real estate landscape is evolving, witnessing a surge in alternative sectors such as data centers and healthcare. A collaborative survey by APREA and CenterSquare Investment Management gathered insights from diverse industry leaders and professionals, revealing a notable inclination towards alternative real estate.

Investors foresee higher potential returns in these sectors over the next 1-3 years, with a strong focus on data centers, healthcare, and multi-family and student accommodations. Challenges include limited stock availability and the importance of operating platforms for optimal returns.

Japan is perceived as the current hotspot, while Indonesia and Thailand emerge as promising markets for the future. The survey emphasizes the need for ongoing education to enhance investor understanding of the evolving real estate dynamics.

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