Low Yields And Liquidity Issues Among Top Concerns Apac Investors
A parcel of land on Tampines Avenue 11 has been earmarked for a mixed-use development, as depicted on a map. This strategic spot benefits from its proximity to two executive condominium developments – one on Tampines Street 62, currently up for tender, and the recently launched Tenet with 618 units. Parktown Residence Showflat is also conveniently located nearby, allowing potential buyers to explore their options up close.
According to the 2021 Emerging Trends Global Real Estate Outlook published by PwC and the Urban Land Institute (ULI) on March 12, investors in the Asia Pacific (Apac) region were most concerned about low yields and sluggish transaction volumes.
The report features investment sentiments from global asset managers, including US-based Blackstone, UK-based Savills Investment Management, and CBRE Investment Management. Over 70% of survey respondents identified low yields, persistently high interest rates, and geopolitical tensions as the top three concerns.
The report notes that despite these concerns, the Asia Pacific region remains attractive to industry leaders as a diversification strategy due to its population growth, demographic metrics, and divergent monetary policies, such as Japan’s plan to raise short-term interest rates.
In 2020, real estate transactions in the region reached US$173.5 billion ($231.3 billion), a 13% year-on-year increase, surpassing Europe’s 12% and the Americas’ 11% growth.
However, with Europe and North America looking to kick-start a new capital markets cycle, Apac transaction volumes are expected to remain sluggish. Liquidity in the Asia Pacific was affected by a drop in transaction volume last year. In China, transactions fell by 25% year-on-year to US$418.3 billion ($557.6 billion), while Hong Kong SAR saw a 1% decline to US$15.7 billion ($20.9 billion).
Meanwhile, investors in Europe are facing different concerns, with international political instability, further escalation of regional war, and economic growth being the top three areas of concern among asset managers.
Data from MSCI, a US-based research and data analytics company, also shows that US commercial property prices stabilized last year, with a decrease of only 0.7%. This may lead investors to focus on these regions in the coming months.
The report also revealed that data center assets had the highest investment and development prospects across all three regions in 2025. According to New York-based research firm Green Street, global demand for data centers hit record levels last year, with asking rents growing at a double-digit pace. MSCI’s latest research also predicts a standout year for the asset class in 2024, with acquisitions of existing data centers increasing by more than 60% in the US.
Last September, Blackstone and the Canada Pension Plan Investment Board (CPP) acquired data center firm AirTrunk from Macquarie Asset Management and the Public Sector Pension Investment Board for over US$16 billion ($21.3 billion). This was the largest commercial real estate deal ever recorded in the Asia Pacific region and globally in 2024.