According to new CBRE research by Ada Choi, Head of Occupier Research, the Asia Pacific region is starting to embrace what 'living with COVID' looks like for their 2022 commercial real estate market recovery plans.
Choi comments, "The current Omicron wave has put a dent on leasing sentiment as restrictions affect site visits and leasing decisions. However, this is likely to be a temporary speed bump on the road to recovery for the region. Leasing sentiment in Singapore and Australia - markets that are opening up and moving to an endemic phase of living with the virus- are the highest in the region. This offers an indication of the way forward for other economies in Asia Pacific once the current wave peaks and subsides. Rents are expected to pick up across offices, retail, and industrial, and landlords are scaling back on incentives. Occupiers are advised to look beyond this temporary slowdown to focus on megatrends like agile working, ESG, and continued e-commerce adoption in their leasing decisions."
CBRE further reports that the Omicron wave is likely to be a temporary speed bump to recovery as rents are expected to increase across office, retail and industrial sectors. The bulk of locations continue to shift away from being tenant-favored. Pressure for higher incentives remained weak, particularly in Mainland China, Australia and India. Rents continued to recover, led by Singapore, Hong Kong SAR and Japan.
Leasing sentiment highest in the region for Singapore and Australia as economies and borders open up, in line with the 'endemic' phase of living with the virus.
Net positive leasing intentions likewise observed in India, Korea, and Mainland China, although Omicron has put a slight dent on recovery.
Elsewhere in the region, Hong Kong saw a decline in tenant enquiries and site visits as many companies swiftly moved to resume work-from-home arrangements, concludes CBRE.