asia pacific investment volumes down by 27% y-凯发国际真人

shanghai, september 7, 2020 – investment activity is expected to improve in h2 2020 but will remain moderate.

“according to data from cushman & wakefield capital markets, overall investment volume in mainland china in h1 2020 totaled approximately rmb88.4 billion, a fall of 30% compared to h2 2019. the beijing and shanghai markets together recorded volume of rmb70 billion, accounting for 80% of the total transaction volume. meanwhile, guangzhou and shenzhen saw pronounced drops from h1 2019, together totaling rmb10 billion,” said alvin yip, president of capital markets, greater china & head of capital markets, china at cushman & wakefield.

“the initial panic arising from the covid-19 outbreak has now subsided, and investors’ confidence in the market has been restored,” continued yip.

“investor activity is resuming as the pandemic has eased in china. investors have resumed inspections, especially for institutional investors with china teams. at the same time, owners are now more rational on price expectations, and the price gap between buyers and sellers has gradually narrowed.

“however, the pandemic is still impacting other countries, and is slowing the pace of foreign investors entering china. onshore investors are expected to continue increasing their market share in the second half of the year. in terms of cap rate, we expect it to remain stable in the second half of the year, while the cap rate of properties in non-core areas will rise slightly. offices with stable rental incomes in core areas remain the preferred option for investors. on the other hand, financing is anticipated to become more challenging due to declining expected rental incomes, slowing sales, falling collateral values and rising risks of real estate projects assessed by financial institutions,” concluded yip.

“investors have remained on the sidelines for much of h1 2020, with volume down 27% year-on-year. as economies reopen, investment activity is expected to increase. logistics appetite continues unabated and there is heightened interest in alternative asset classes. we are also experiencing ongoing interest in the office sector, albeit generally for lower risk stabilized assets in cbd areas,” said gordon marsden, regional director, asia pacific capital markets at cushman & wakefield. 

the overall investment volume in apac was us$119 billion, down by almost 40% y-o-y in q1 2020. on the positive side, volume picked up in q2 2020 and reached over us$200 billion.

key cities such as shanghai, beijing, seoul and tokyo saw activity through h1 and this is expected to continue in h2.

regarding investment sectors, all asset class investment volumes are below rolling averages, although the retail and hotel sectors have absorbed the greatest shocks, with investment volumes down 52% and 41% y-o-y respectively in h1 2020. interest in retail or hotel assets will remain sluggish, with the exception of community malls. however, retail and hotel properties with value-add opportunities or with major price adjustment are still attractive to investors.

office investment is down 43% to us$27 billion. in contrast, the logistics sector continues to attract investors’ attention due to the growth of e-commerce. despite investment volume dropping y-o-y, the decline was less dramatic when compared to other sectors, at only 3% in h1 2020. the drop-off is also more likely to be the result of a supply shortage rather a than a fall in demand.

capital remains sufficient, and growing numbers of investors are now seeking co-investment opportunities. this may include follow-on investments with managers and operators where the relationship was formed pre-covid-19, and where the need to travel to consolidate or cement the relationship is not as essential.

with china leading a rebound from covid-19, the rest of apac is expected to resume gradually by the end of the year or early next year. the apac region continues to be an investment destination for global capital, particularly in mainstream sectors such as office and logistics, as well as growing subsectors such as data centers and senior living. while a full recovery is still some way off, volumes are likely to have bottomed out and should gain momentum in the latter part of the year.

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about cushman & wakefield
cushman & wakefield (nyse: cwk) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. cushman & wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. across greater china, there are 22 offices servicing the local market. the company won four of the top awards in the euromoney survey 2017 and 2018 in the categories of overall, agency letting/sales, valuation and research in china. in 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. to learn more, visit or follow @cushwake on twitter.

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mandy qian
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