Asia Real Estate Outlook

25 min read 17 Jul 20

Summary: In line with global economies, a recession scenario appears likely for the five developed Asia Pacific economies this year. However their relative preparedness in handling the pandemic and governments’ strong fiscal and monetary support means they are expected to recover relatively quickly from H1 2021 onwards.

This paper highlights the structural shifts that are likely to be reinforced by COVID-19 and how these can be leveraged by investors to help future-proof their investment portfolios. Key areas of opportunity include:

  • Growing e-commerce penetration, expansion of supply chain capacities and automation are likely to drive tailwinds for the logistics sector in markets with a relatively bigger domestic consumer base
  • Increasing economic digitalisation leading to wider adoption of omni-channel retailing and telecommuting is expected to fuel ‘hotelisation’ of the retail and office sector, with high quality assets that offer flexibility likely to be more attractive to occupiers
  • Rising need for convenience, availability of amenities and employment are likely to continue driving demand for inner-city residential by millennials and Generation Z, thereby bolstering the sector’s income resilience

The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested.

By M&G Real Estate