Thought Leadership

The retail sector is considered a core asset class in the Indian real estate industry. Currently, it is recovering from the toughest business climate it has ever experienced due to the pandemic. Retailers, developers, and investors are taking cautious steps while delving into the segment, owing to 2 main factors – the e-commerce onslaught, and higher digital adoption among consumers.

There was a strong return to malls after restrictions were lifted. Revenues and footfalls of mall developers and retailers have largely recovered to pre-pandemic levels.

Cushman & Wakefield’s latest report on a new journey for retail realty addresses:

Rebound – Retail real estate’s current story
Revenge – As pandemic fears recede, a shopping culture has emerged
Re-Invent – Retailers and mall developers consider the adoption of digital & analytics and tech integrations

To read more about the journey of the retail sector of India’s real estate, read the report: Rebound, Revenge & Re-Invent.

Confidence in Asia Pacific’s Hotels & Hospitality market continues to grow as borders reopen and operating performance recovers to pre-pandemic levels.

The recovery continues to be largely driven by domestic demand, with international arrivals accelerating in markets within the Pacific and Southeast Asia, which have loosened entry and quarantine restrictions and are now open to all arrivals. CBRE forecasts tourism arrivals within the region to reach pre-pandemic levels by 2024, with hotels performance to reach 2019 levels in the same period.

Furthermore, given the daily pricing structure and flexibility of rate changes in an evolving economic climate, hotels provide an inflationary hedge. CBRE is therefore forecasting increased investor appetite for operational real estate, such as hotels, as a strategy to enhance and/or maintain portfolio returns.

This report was originally published in https://www.cbre.com/insights/reports/2022-asia-pacific-hotels-and-hospitality-a-roadmap-to-recovery

This report, Part II in Cushman & Wakefield’s Reset 2022 trilogy, brings together the views of a panel of institutional investors as shared during the webinar “Unlocking Strategy in a Changing Environment”.

The analysis in this report draws upon these views along with live audience polling conducted during the webinar and the results of an investor intention survey conducted over approximately three weeks in August 2022.

View the replay of the webinar Read the summary of the webinar

Rising inflation, zero-covid policies in mainland China and ongoing supply chain bottlenecks are just a few of the headwinds that continue to cloud the operating environment for occupiers of commercial real estate in Asia Pacific.

As slowing GDP growth prompts many companies to tighten their belts, CBRE’s recent surveys of office, retail and logistics tenants, along with wide-ranging discussions with corporate clients, have uncovered several common themes in how occupiers are adapting and responding to these challenges.

The seven key trends we expect to influence occupier portfolio strategy and leasing demand over the remainder of the year and into 2023 are as follows:

• A mild global recession
• Continued cautious expansion
• Ongoing flight to quality
• Rising fit-out costs
• A shortage of talent
• Building resilience
• Investing in technology

This report was originally published in https://www.cbre.com/insights/briefs/asia-pacific-occupier-trends—concerns-priorities-and-strategies-ahead

In Colliers Hotel Insights | Q2 2022, we look at:

• RevPAR and ADR performance across Asia Pacific in Q2
• The recovery of Singapore’s hotel market, including an outlook of supply
• The case for investing in hotel assets and recommended strategies for investors

Two quarters into 2022 and what travel in a post-COVID-19 world will be is starting to take shape. Travel restrictions continue to be reduced en-masse across the world, with airline traffic up to 69% of pre-COVID (2019) levels at the end of March 2022. According to the latest forecast by IATA, air traffic is expected to exceed pre-COVID levels by 2024. Driving demand for those seats will be domestic and increasing number of tourists, with the UNWTO forecast that by tourism arrivals would have exceeded 2019 levels by the end of 2023 in certain regions.

Once heralded as the harbinger of doom for business and group travel – it seems the desire to meet in-person has once again triumphed, as leisure (mostly visit, friends and relatives), meetings, and events travel lead the recovery.

However, once again head winds threaten. Whether it’s the ever-present threat of a resurgence of a deadly variant, high inflation, labour bottlenecks and increased cost of living has meant reduced disposable income. Question is, will the desire to travel outweigh the need to save, thereby dampening the recovery, at least in the short-term.

In terms of hotel performance, room occupancies across Asia increased to 48.5%, with ADR improving to US$83.69, a recovery in RevPAR of 12.3%. However, there remains a great divide between the more open Southern countries versus the closed Northern region, with China especially remaining closed for the foreseeable future.

This report was originally published in https://www.colliers.com/en-hk/research/2022-q2-hospitality-insights-colliers

A lean supply chain, at its heart, focusses on inventory optimisation and operational excellence. It aims to eliminate waste at every stage of the production and distribution process, and so have courted additional terms such as “continuous flow” and “just-in-time”. The critical aim is optimisation of inventory management rather than minimisation, and with its focus on consistency and repeatability, lean supply chains are designed to be arguably less flexible. For this reason, some have come to view this type of network as irrelevant in a disrupted world – agility rules. However, this is not the case.

Cushman & Wakefield’s latest report, Keeping Lean Supply Chains Relevant in a Post-pandemic World, explores key trends in the supply chain industry, highlighting the importance of optimising supply chain networks, with a key focus on lean supply chain and how it will continue to be relevant. 

This report was originally published in https://www.cushmanwakefield.com/en/insights/supply-chain-network-design-optimisation

2019 was a record year for commercial real estate, the office market was at an all-time high with positive sentiments from both occupiers and developers. However, the disruption induced by the COVID-19 pandemic brought the rise to a complete standstill.

Post the second wave in 2021, demand for quality spaces began to rise swiftly and steadily, with occupiers taking utmost advantage of tenant-favorable commercial terms. This trend continues to build up in Q2 2022, despite certain challenges.

The 5 Trigger Points of Commercial Real Estate focuses on fundamental aspects that are silently working to strengthen the recovery and sustain the rise of commercial real estate.

This report was originally published in https://www.cushmanwakefield.com/en/india/insights/five-trigger-points-for-commercial-real-estate

Responses from real estate investors in Japan were compiled in this survey. The responses include their expected returns, investment outlook, and rental growth. Surveyed firms include asset managers, securitization developers, life insurance, commercial banks and other financial institutions, investment banks, pension funds, and real estate leasing.

Cushman & Wakefield recently released “Office of the Future Revisited” in which a global view of how the demand for and use of office space is changing. Within the report, three realities were presented:

1. Demand for office space is accelerating;

2. Hybrid is here to stay; and

3. The role of the office has changed.

While all three of these realities are true for the Asia Pacific region, as a geographically large and culturally diverse region, we see nuance in how these realities manifest between markets.

• Asia Pacific continues to lead the world in office demand
• The region is, however, lagging somewhat when considering the shift to hybrid working
• Greater change management needs to be delivered as pressure builds from a growing, younger workforce
• With the nuances and differences between markets, solutions and approaches will need to vary across the region
• Corporate employers should begin testing and piloting now to meet the needs of their current and future workforce

This report was originally published in https://www.cushmanwakefield.com/en/insights/apac-office-of-the-future-revisited

• Pandemic-related border controls, mainland China’s zero-covid policy, the rising cost of global shipping and higher energy prices will continue to pressure Southeast Asian supply chains in 2022 and mostly likely beyond.
• As occupiers respond by strengthening supply chain resilience and seeking to strike a balance between “just-in-time” and “just-in-case” inventory models, new demand for modern warehouses is poised for substantial growth.
• Demand will also benefit from the implementation of China Plus One strategies by manufacturers seeking to relocate production out of mainland China and into multiple bases in nearby markets, with ASEAN economies set to be clear winners.
• As the RCEP and other FTAs take effect, Southeast Asian markets’ tariffs with their major trading partners will fall significantly, benefiting export growth and increasing their role and importance in global supply chains, spurring additional real estate requirements. The continued growth of the region’s e-commerce industry will also continue to drive warehouse demand.
• As well as booming occupier demand, investment in Southeast Asian manufacturing and logistics real estate will accelerate, with opportunities in developed markets likely to focus on developing institutional grade logistics stock to ride on local consumer market growth and the increasing importance of Southeast Asia in global value chains.

This report was originally published in https://apacresearch.cbre.com/en/research-and-reports/Asia-Pacific-ViewPoint–Prolonged-Supply-Chain-Disruption-to-Accelerate-Southeast-Asian-Logistics-Re