Based on CBRE's latest research, Asia Pacific's office sector continues to be a resilient asset class and attractive investment opportunity in the region.
CBRE further reports office investment in Asia Pacific remains resilient despite weaker sentiment, and offices remain an important investable asset class in the region. Around $63 billion was invested in Asia Pacific offices in 2022, just 3.8% lower than the pre-pandemic level in 2019.
Office rents in Asia Pacific has entered the early stages of recovery, the rebound will be L-shaped with rents in most markets eventually bottoming out in 2024 and 2025.
Seoul and most of the major Australian cities are the outperformers, all of which are forecasted to proceed through the upward rental cycle over the next three years.
Asia Pacific is leading the return to the office, with 85% of staff in the region work from the office at least three days a week. CBRE estimates that office attendance in Asia Pacific will be around 10%-15% below pre-pandemic levels for the foreseeable future.
The recovery from the rental correction and further yield expansion will create opportunities for investors in Asia Pacific's office market. Meanwhile, commercial land sales in several Asia Pacific markets show signs of slowdown, which will provide the region with some relief from new office supply.
As investors adopt more risk-adverse strategies to navigate through an increasingly unstable economic environment, diversifying into Asia Pacific are likely to achieve more stable returns, says CBRE.