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November was another challenging month with the results of the US election weighing on the REIT space and Asian currencies. However, there was a decent recovery starting mid-month and we did start to see a recovery in the JPY as attention is now shifting to monetary policy with upcoming meetings by the Fed and BOJ. Overall, we expect that the BOJ has enough justification to move again in December as US jobs and growth continue to be solid which reduces the likelihood of aggressive Fed interest rate cuts and Japan’s economic data continues to be solid. Inflation is running above the BOJ target for 30 consecutive months and while there are some more dovish members that may dissent, we expect another hike this December. 

Trump 2.0 has become a major worry for Asia and the impact of higher rates and weaker currencies led to a sharp sell-off in October well before the election. The magnitude was similar to the sell-off following Trump’s surprise victory in 2016 as were the concerns (i.e., protectionist policies, inflation concerns). RE Securities in Asia ended up rallying from the December 2016 lows about one month after the election and rose 15% from the bottom despite overall economic concerns including interest rates. The Fed raised interest rates three times in 2017. What appears different this time is that the correction started well before the election result in both securities and currencies and while the pace of interest rate cuts could be dialled back from previous expectations, it is unlikely the Fed will tighten in 2025. 

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CBRE’s latest leasing market sentiment index reveals that overall leasing sentiment improved in Q4 2024, led by Japan and Korea, with the leasing pipeline to improve slightly across all sectors in 2025:

• Office – Lower appetite for expansion: There was a slight increase in enquiries and site inspections this quarter, with most occupiers opting for lease renewals over relocations. Selected markets, particularly those in Greater China, continued to report downward pressure on rents. Expansionary sentiment remained strong in Japan, but tenants in mainland China focused on downsizing to cut costs.
• Retail – Upbeat sentiment: Leasing sentiment remained positive, backed by strong expansionary demand. Hong Kong SAR and Australia reported a rebound in sentiment amid a rise in enquiries and site inspections. The leasing market continued to favour landlords, with rents witnessing steady gains.
• Industrial & Logistics – Tenant-favoured: Most surveyed markets remained in favour of tenants, consistent with the previous quarter. Rising incentives were also observed. Expansionary appetite is stronger compared to last year.

 

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The private credit market in APAC is experiencing rapid growth, offering flexible funding solutions as traditional bank lending tightens. Key opportunities include construction financing, value-add projects, and conversions such as office-to-residential developments, appealing to both investors and asset owners. With increasing institutional interest and growing demand from Asian investors, private credit is solidifying its role as a vital financing tool in the region’s real estate landscape.

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Stay ahead of the curve with APREA's exclusive monthly update tracking the performance of China REITs.

APREA C-REITs Roundup provides the latest info and developments in C-REITs. Available for APREA members only, this important resource is your key to navigating the landscape of C-REITs.

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