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2022 Apac real estate investments down 27% y-o-y on rate hikes, cooling sentiment: JLL

/ EdgeProp Singapore |

January 31, 2023 3:34 PM SGT

Last year, Singapore was the best-performing market in the region, with total commercial investments increasing 53% y-o-y to US$14.2 billion. (Pictured, Singapore's downtown skyline, by Samuel Isaac Chua/The Edge Singapore)

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SINGAPORE (EDGEPROP) - Commercial real estate investments in the Asia Pacific region slipped 27% y-o-y as a tightening interest rate cycle and global macroeconomic uncertainties weighed on investor sentiment last year. According to a market report by JLL, direct real estate investment into the region totalled US$129 billion ($178.2 billion) in FY2022.

“Investors reset short-term deployment strategies in 2022 but remain committed to the longer-term prospects of the Asia Pacific real estate market. Price discovery will continue to be a major theme for investors in 2023,” says Stuart Crow, CEO, capital markets, Asia Pacific, at JLL.

Last year, Singapore was the best-performing market in the region, with total commercial investments increasing 53% y-o-y to US$14.2 billion. Meanwhile, although Hong Kong’s attractiveness improved as Covid-19 curbs were relaxed, its FY2022 investment volume totalled US$ 7.7 billion, a 24% y-o-y decline. (Find Singapore commercial properties with our commercial directory)

Investors turned bullish on the hotel sector, buoyed by a resumption in international leisure and business travel. Last year, the sector was the best-performing asset class, ending with US$10.1 billion in capital investments, up 7% y-o-y.

Office assets were more selectively traded as the price division and the gap between core and secondary office assets persisted. This sector finished the year with US$60.5 billion in investments, down 18.7% y-o-y.

“We expect the bright spots of strong fundamentals in select office markets, value-add retail, and cyclical and opportunistic buying in the region’s more mature markets to help drive deal flows in 2023,” says Pamela Ambler, head of investor intelligence, Asia Pacific, at JLL.

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