Feature: FOCUS ON ASIA
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Hong Kong’s strong growth prospects deepen the allure of schemes like Lee Tung Avenue
Rebounding deal volumes in 2021 proved that despite pandemic restrictions and geopolitical worries, investors are betting on Asia. Isobel Lee reports
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eal estate markets across the Asia-Pacific (APAC) region were remarkably resilient in 2021, with the year seeing an estimated 30% rise in volumes compared to 2020, according to data from Savills. Simon Smith, Savills’ head of research Asia-Pacific (APAC), says: “Transaction volumes had fallen to 2017 levels in 2020, but the bounce back is taking us into record territory for the year. Whether we will see similarly high levels of activity in 2022 is open to debate, and much will depend on how the pandemic develops and
how policy makers respond.” However, all signs suggest that there is plenty to be positive about. APAC economies recovered much lost GDP growth in 2021, and are set to expand further in 2022, with India (8.8%) and China (8.2%) leading the way, while the forecasts for Hong Kong and Singapore (6.5% and 6.4% respectively) are also strong. “The weight of capital allocated to the region by private equity real estate funds suggests an active year of deal making ahead. At the same time, a relatively benign inflationary environment leads us to believe that any interest rate rises
will be modest,” Smith says. Across the region, investors are finding opportunities that fit a range of strategies, thanks to APAC’s compelling mix of developed and developing markets. But its dominant territory remains China, the world’s biggest property market by asset value, with around 20% of the globe’s real estate. Its vast geographies are inhabited by 1.4 billion people, including a giant and aspirational middle class — although the latest demographic clues suggest that population growth might now have peaked. Many real estate funds, both do-
mestic and cross-border, are bullish on the country, says James Macdonald, head of Savills research for China. “We are seeing a lot of investors interested in new economy sectors including logistics — both dry and cold; life sciences and data centres — though the latter is challenging to deploy capital; as well as increasing interest in the multifamily sector, still at a nascent stage of development.” He notes that longer term traditional investors are seeking out opportunities for the discounted pricing of commercial assets, and increasingly looking at debt deals.
MIPIM PREVIEW • 64 • February 2022 MIPIM_Asia_+D_+S.indd 2
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