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JLL: Record investment volume expected for Asia Pacific commercial real estate assets in 2022 amid heightened competition

By Nadine Yong

/ EdgeProp Singapore |

March 18, 2022 4:58 PM SGT

Investor confidence in Asia Pacific real estate remains strong but heightened competition for assets will emerge as a significant challenge. (Photo: Albert Chua/EdgeProp)

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SINGAPORE (EDGEPROP) - Investor confidence in Asia Pacific real estate remains strong but heightened competition for assets will emerge as a significant challenge for investors this year when deploying capital.

The finding was published in JLL’s Investor Sentiment Barometer 2022, which polled top investment leaders from 37 global and regional investors about their future strategic investment decisions this year.

Most investors plan on increasing their real estate assets under management (AUM) this year. Nine in 10 survey respondents expect investment volume to set new highs this year, with 41% expecting volumes to rise to between US$178 billion ($241 billion) and US$192 billion. Investment volume in 2021 totalled US$177.3 billion.

In expectation of the heightened competition for assets, respondents acknowledged the need to diversify deployment strategies, 52% of respondents favoured a core-plus investment strategies, and 53% of respondents favoured value-add strategies.

In terms of the type of deals, while direct deals and joint ventures will be the most active deal types, more investors will increase their focus on other deal types, such as platform/entity-level deals.

“Competition for assets will emerge as one of the defining themes for the Asia Pacific commercial real estate market in 2022. Despite the increased volatility in global equity markets we see continued competition for real estate assets, and scarcity of product is resulting in many investors focusing on platform deals and M&A,” says Stuart Crow, CEO, Capital Markets, Asia Pacific, JLL. (Find Singapore commercial properties with our commercial directory)

In terms of sectors and geographies, investors favour assets in sectors that provide income resilience within stable and mature economies. Logistics in Sydney, multi-family in Japan and office space in Singapore are the top three markets investors plan on investing more this year.

Besides the increased competition, approximately half of the respondents also cited interest rate uncertainty and lack of suitable investment products as key capital deployment challenges this year.

Overall, the survey results reflect a positive market outlook this year, with greater activity across more diverse investment strategies as investors seek to capitalise on the upside opportunities in the wake of the pandemic.

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