The year we reimagined Asia Pacific real estate

In 2020, the world paused…or has it? 

Based on JLL’s own insights and on my conversations with clients and colleagues, we see many indicators of a broad re-imagination rather than a complete stagnation in Asia Pacific real estate. Rather than a pause, the current environment is prompting an acceleration of megatrends that were already happening in real estate.

While no one can deny the immediate and very real challenges we all face, it is becoming clear that many of the changes afoot will have positive outcomes for investors, corporate occupiers, and end users of real estate. 

Capital and cities 

Capital flows is one example. Volumes in Asia Pacific declined 32% year-on-year in the first half of 2020. While this is not surprising, what tells a longer-term story is that there remains over U$40 billion in dry powder earmarked for investment in the region. Capital levels of this size will ensure that this will not be the end of real estate as we know it. 

Instead, we’re expecting investors to see past immediate headwinds and increase allocations to Asia Pacific real estate. Buoyed by an expected period of prolonged low bond yields and unpredictable equity markets, investors will turn to higher yielding and stable assets like real estate. Combined with improving transparency across Asia Pacific and favourable demographics, the real estate market will emerge from this crisis more attractive than before. 

Urbanisation will further fuel the reimagining of Asia Pacific real estate. Approximately one million people are moving to Asia Pacific’s cities each week. COVID-19 will not reverse the tide. Cities have historically bounced back from pandemics and we can expect our built environments to reset and evolve to be safer for the people that inhabit them.  

Mainstreaming niche experiences 

What I find encouraging is how certain more positive changes have been accelerated during this time. For one, the pandemic has shifted perceptions around the scale, effectiveness and potential of remote working. JLL has been talking about workplace mobility and flexibility for a long time. The mass work-from-home exercise has reinforced its feasibility. People across the region have largely embraced the concept and agile work strategies are expected to increase, reinvigorating demand for flexible space.

At the same time technological adoption needs to ramp up to maximize flexible and sustainable practices. Real estate has long been a tech laggard and the current crisis is providing the impetus to transition previously niche concepts, like predicative analysis in the measurement of health and safety and space efficiency, into the mainstream. 

Fitter, happier, more productive

More practically, office form and function will continue to evolve, as it has over the past 20 years. Clients are already telling me that health and wellness will now take a central role in their leasing and investment decisions. Forward-thinking companies will be investing in ways to improve wellbeing for employees, as well as reducing the carbon footprint of their real estate. Green buildings will be a beneficiary.

The current social and economic crisis has and will continue to be challenging for those of us that own or occupy buildings. However, through our conversations, it is becoming increasingly clear that this is a moment where we have a chance to reset and reimagine the role of real estate in our cities and communities for the future. 

Click here to find out more about how JLL is reimagining real estate.