Winning in Growth Cities, Asia Pacific

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Photo by Alain Pham on Unsplash
  • Asia Pacific is the biggest source of cross border capital for the fourth year running, led by Singapore and South Korea
  • Asia Pacific claims seven of the top 25 cities

Tokyo has claimed the top spot as the highest-ranked market for real estate investment in Asia Pacific, according to Cushman & Wakefield’s ‘Winning in Growth Cities’ investment report. Tokyo replaced Hong Kong, which saw a notable fall of 38% y-o-y.

Asia Pacific claimed seven of the top 25 cities compared to five in Europe. As with North America, a number of these destinations were in growth mode and the top 25 overall again outperformed, with volumes rising 5% and their market share increasing from 53% to 56% as investors focussed on the biggest and most liquid markets.

Beijing was the fastest growing major Asian city, with volumes doubling, resulting in the city moving up 11 places in the ranking to number 25. Globally, New York strengthened its position as the number one global city for real estate investment, growing 20% year-on-year to take the top spot in the index for the eighth year running. Los Angeles took second spot, while San Francisco climbed three places to third – in the process overtaking London in fourth and Paris in fifth.

Francis Li, International Director, Head of Capital Markets, Greater China at Cushman & Wakefield, commented: “Asia Pacific remains a global growth leader and investors will continue to channel funds here to ride the region’s long-term structural dynamics. While investors will turn more selective in a late cycle environment, gateway cities with stable fundamentals will continue to lead investments. We believe the region’s diverse economic backdrop and demographically driven growth markets in India and Southeast Asia to remain compelling prospects across cycles; the current round of deleveraging in China have also unlocked opportunities across its cities.

“Tokyo’s rise up the rankings ahead of Hong Kong comes as no surprise due to its strong fundamentals, fed by a tourism boom and investment momentum in the run up to the Olympics. The city’s real estate is in an investment sweet spot: strong pre-leasing commitments and robust demand have whittled office vacancies to record lows and the lower-for-longer environment continues to fuel investments by J-REITs and foreign funds.”