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Emerging Trends in Real Estate® Asia Pacific 2022

As real estate investors plan their 2022 post-pandemic strategies, the road ahead is fraught with uncertainty. After nearly two years of lockdowns and travel embargoes, regional transactions are rebounding amid the reshaped contours of the investment landscape caused by the profound changes in the ways we use real estate today in the post-pandemic world. This 16th edition of Emerging Trends in Real Estate, a joint undertaking between PwC and the Urban Land Institute, aims to shed light on real estate investment and development trends, and other issues within Asia Pacific.

Key findings

  • In terms of capital flows, rising investment volumes have targeted mainly assets in established gateway cities, as investors seek safety in economically stable and liquid markets.
  • Travel embargoes have meant reduced cross-border purchasing, as well as a trend for Asia Pacific capital, when it does venture offshore, to remain within the region rather than migrating to the West.
  • Singapore was the largest exporter of regional capital in 2021, with both sovereign wealth and local real estate investment trusts (REITs) bidding aggressively for higher-yielding offshore properties.
  • Tokyo placed top in this year’s investment prospect rankings, swapping places with Singapore, which featured first in both the 2020 and 2021 surveys.
  • Tokyo’s enduring popularity is down to a variety of factors: a stable economy combined with a deep and liquid market, resilient asset values, and a long track record of better-than expected returns.

Impact of COVID-19 across real estate asset classes


Office has been the go-to asset class for many years, but its popularity has suffered lately as investors question its staying power in the age of corporate work-from-home policies. At the same time, many investors are convinced that the impact will be limited in Asia and so are now taking contrarian bets, focusing on well-located, good-quality assets.


The surging popularity of logistics as an asset class is due to a combination of factors: structural undersupply of high-quality assets, the evolution of more sophisticated supply chains, and the rapid growth in e-commerce retailing, catalysed recently by pandemic lockdowns. Transaction volumes have boomed this year, but investor appetite is undiminished despite ongoing yield compression.


The explosive growth of e-commerce retailing in the wake of widespread lockdowns has created a pervasive sense of negativity towards conventional retail assets, exacerbating a decline that had started even before COVID-19 arrived. At the right price, however, any asset becomes attractive. The sector seems to have hit that point around the middle of 2021, as third quarter retail transaction volumes spiked.


Weak economic fundamentals, combined with rising inflation, make the residential sector appealing to institutional capital. Many funds are now looking to participate in the Asia Pacific region’s growing multifamily sector, especially in the leading markets of Japan, Australia, and China.


Hard hit by pandemic travel embargoes, the hotel sector has become a target for investors seeking distress deals. They have been mostly disappointed in 2021, however, as banks hold back on foreclosures and owners hold on in the hope of better times ahead as domestic travel picks up and safe travel corridors open.

As new dynamics unfold, investors are adapting in a number of ways

  • Focusing on operations and services. Today, commercial real estate is no longer regarded as a plain-vanilla investment held over time. With yields continuing to compress and occupiers demanding more, landlords are becoming more proactive in asset management, either by providing new amenities for tenants or by investing in operationally intensive asset classes such as data centres.
  • Pursuing value-add projects. As markets evolve, many existing buildings are becoming inefficient. Buying to renovate has become one way to arbitrage those inefficiencies, whether through the use of technology, changing building usage, or upgrading to a higher environmental standard.
  • Investing in the theme of decentralisation. Central business districts (CBDs) have traditionally represented the biggest store of wealth in real estate terms, but the primacy of the CBD is no longer secure. Not only do secondary business hubs offer cheaper rents, but with many employees now working at least part-time from their homes, employers are responding by providing workplaces nearer to where they live.
  • Buying into the new economy. Companies focused on the growing digitisation of the economy, which are less inclined to locate in CBDs, are also driving this trend. This includes both out-and-out technology companies as well as traditional businesses that are digitally based such as online education, e-commerce retailing, or even logistics companies that serve demand from internet-based businesses.
  • Niche asset classes boost yields. Investors have been buying niche assets for years as a way to eke out higher returns. This trend continues, although it is now also seen as a way to pursue demographic change across society. Retirement living is one example, while work-from-home networking requirements and millennial shopping preferences are driving demand for data centres and cold storage facilities.

"Despite a challenging 2020, Singapore remained resilient with rebound in transactions in 2021 and strong prices in the office space. The city-state – ranked second best city in Asia Pacific for investment prospects next year – continues to remain attractive with expectations of supply shortages, growth in office rentals, and possible relocations of Asia Pacific HQs to Singapore. The city-state is also the biggest single source of outward investment with US$9.3billion into Asia Pacific during the first nine months of 2021."

Yeow Chee Keong, Real Estate and Hospitality Leader, PwC Singapore

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Yeow Chee Keong

Yeow Chee Keong

Real Estate and Hospitality Leader

Tel: +65 9018 1798

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