Emerging Trends in Real Estate - Asia Pacific 2020
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Emerging Trends in Real Estate ® Asia Pacific 2020
Contents
iv Executive Summary
vi Notice to Readers
1 Chapter 1: Defying Gravity?
3 Geopolitics: the Good, the Bad, and the Ugly
4 Trade Friction: Winners and Losers
6 More Caution, More Core
7 Spreading the Load
7 Yields Begin to Rise . . .
8 . . . But Not Everywhere
9 Focus on FX
10 Pockets of Distress
12 Sustainability: Coming of Age
13 Coworking: Does It Work?
14 Retail: Is Asia Different?
16 Focus on the End User
16 Nervous about Niche?
18 Accounting for Climate Change
19 Embracing Technology
22 Chapter 2: Real Estate Capital Flows
24 Global Funds Under-Allocated
25 Japan’s Slow-Motion Exodus
26 Fundraising Slows
26 Dry Powder Builds
27 Tighter Bank Lending
28 Nonbank Lending Picks Up . . .
29 . . . But Appetite Remains Low
30 REITs on the Rise
30 Singapore
31 Japan
31 Australia
31 India
34 Chapter 3: Markets and Sectors to Watch
35 Top Investment Cities
Emerging Trends in Real Estate® 47 Property Types in Perspective
Asia Pacific 2020
53 Interviewees
A publication from:
Emerging Trends in Real Estate® Asia Pacific 2020 i
Editorial Leadership Team
Emerging Trends in Real Estate® PwC Advisers and Researchers by Territories
Asia Pacific 2020 Chairs
K.K. So, PwC Australia India
John Fitzgerald, Urban Land Institute Andrew Cloke Anish Sanghvi
Bianca Buckman Bhairav Dalal
Principal Authors Chelsea Hancock Dhiren Thakkar
Mark Cooper, Urban Land Institute Consultant Christian Holle Tanya Tandon
Alex Frew McMillan, Urban Land Institute Consultant David McDougall
Indonesia
James Dunning
Brian Arnold
Contributing Editor James McKenzie
David Wake
Colin Galloway, Urban Land Institute Jane Reilly
Margie Margaret
Josh Cardwell
Contributing Researchers Liz Stesel Japan
Michael Owen, Urban Land Institute Morgan Hart Akemi Kitou
Nick Antonopoulos Eishin Funahashi
Pauline Oh, Urban Land Institute
Nita Prekazi Hideo Ohta
Yusnita Baharuddin, Urban Land Institute
Rachel Smith Hiroshi Takagi
Ross Hamilton Koichiro Hirayama
ULI Editorial and Production Staff Scott Hadfield Raymond Kahn
James A. Mulligan, Senior Editor Shannon Davis Soichiro Seriguchi
David James Rose, Managing Editor/Manuscript Editor Sue Horlin Takashi Yabutani
May Chow, Senior Vice President, Marketing and Tony Massaro Takehisa Hidai
Communications, Asia Pacific Takeshi Nagashima
Mainland China
Takeshi Yamaguchi
Lawreane Jamie de los Santos, Designer Gang Chen
G. Bin Zhao Luxembourg
Kees Hage
Hong Kong SAR
Robert Castelein
K.K. So
Paul Walters Philippines
David Kan Malou Lim
Taiwan Singapore
Jason Liu Chee Keong Yeow
David Tien Magdelene Chua
Bonnie Ho Maan Huey Lim
Emerging Trends in Real Estate® is a trademark of PwC and is registered in the United States and other
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Recommended bibliographic listing:
PwC and the Urban Land Institute: Emerging Trends in Real Estate® Asia Pacific 2020. Washington, D.C.:
PwC and the Urban Land Institute, 2019.
ISBN: 978-0-87420-442-1
ii Emerging Trends in Real Estate® Asia Pacific 2020
Executive Summary
Nonetheless, caution is widespread,
Survey Responses by Geographic Scope of Firm
especially as yields begin to rise in some
markets. Unusually, geopolitics has
become the new wildcard, with China-U.S. Other focus
trade friction, protests in Hong Kong, and
1%
More than a decade since the global financial crisis, Asia Pacific real estate continues the spat between Japan and South Korea
to produce strong returns. But as the clock ticks down towards the end of the current causing the most concern. Interviewees
cycle, caution is increasingly embedded into investor strategies. highlighted a handful of markets or sectors Focused primarily on
Pan-Asia focus 24%
that look most vulnerable to localised 44% one country/territory
This despite the fact that there is no clear consensus as to whether the market is near, downturns—mainland China, Hong Kong
at, or beyond its peak. In part, this is because of the heterogeneous nature of local SAR, and India—and these may offer
markets. As one Singaporean developer observed: “The risk of a market downturn has buying opportunities in the longer term.
increased significantly, but it’s market specific.” In addition, markets and sectors across
the Asia Pacific are often at different stages of their own cycles. Singapore, for example, Nevertheless, sourcing deals remains as
has only now rebounded from a slump that bottomed around three years ago, while hard as ever, forcing investors to find other Global focus 31%
other markets have been riding the same wave after six years or more. Finally, with ways to get capital into the market. Some,
economic growth continuing at a reasonable clip, interest rates remaining at near-record for example, are turning to joint ventures,
lows, and with ever-increasing amounts of capital circulating around the region looking buying slices of larger assets that also
for an investment home, it is hard to see where the catalyst for the next recession is allow them to spread their risk. Larger Source: Emerging Trends in Real Estate Asia Pacific 2020 survey.
going to come from. In the words of one private-equity investor: “If you compare where investors, meanwhile, are boosting their
Asia is today versus where the developed markets are, cyclically we feel like we’re in a commitment to core markets and, where
better position.” possible, core assets, with Australia,
Japan, and Singapore the most popular. After years in the shadows, sustainability In China, local regulations have drastically
An outlier, but a very popular one, is is now finally becoming a priority for the restricted outflows in 2019, but the slack
Ho Chi Minh City—an emerging-market region’s largest investors, and also many has been taken up by others, in particular
growth hedge against more muted core smaller ones. Landlords have come Singapore and South Korea, while
market performance. around to the view that incorporating outflows from Japan are also picking up
Survey Responses by Country/Territory
sustainable features into their buildings and can be expected to grow rapidly in
The office sector remains the most will allow them both to cut running costs coming years.
popular asset class, although business and increase rents as tenants become
30 models in the fastest-growing component more willing to pay for space that acts as a The sheer weight of capital now in
of that sector—flexible workspace—are magnet for talented staff. circulation means that competition to
25 increasingly being called into question. place it in regional markets continues
The industrial and logistics space, In terms of capital flows, cross-border unabated. One result of this is that
22.4%
investment funds are holding increasing
Percentage of responses
20 meanwhile, is still the sector most often investment patterns into the Asia Pacific
13.6% tipped for outperformance. While the Asia are being affected this year by the rising amounts of capital they are unable to
18.4%
12.7%
Pacific region is still undersupplied with tide of antiglobalism in markets worldwide, spend. When they do spend it, however,
15
modern logistics space, more investors with incoming capital from the United financing for deals is for the most part
are now seeking excess returns in States and Europe down 28 per cent readily available (apart from in China and
11.6%
10 10.5%
7.1% subsectors of that market, such as cold year-on-year in the second quarter of 2019 India, where the dynamics of domestic
storage or last-mile warehouses. to just US$2.54 billion—the lowest figure markets have seen banks retrench).
5 since 2012. At the same time, however, Lending practices have been tightened to
3.7%
There is a growing perception that the the value of cross-border deals involving an extent, but for creditworthy investors
0 retail sector in Asia has been oversold, money from within the Asia Pacific was there is no problem. As one Hong
Australia Mainland Hong Kong India Japan Philippines Singapore Others* Kong–based advisor put it: “There’s no
China SAR with too many good assets penalised due up 23 per cent year-on-year to US$7.76
to problems surfacing elsewhere in the billion. This reflects the huge volume of change at the top. We see easy access
world. Selective but sometimes large- capital held by regional institutions and for low-leveraged deals from good-
scale buying has been seen in several sovereign funds that is outgrowing the quality sponsors.” With interest rates in
Source: Emerging Trends in Real Estate Asia Pacific 2020 survey. markets, with investors now increasingly capacity of domestic markets to absorb. the second half of 2019 reversing course
focused on adapting existing assets to to the downside, the overarching trend
*Includes New Zealand, Thailand, Malaysia, South Korea, United Kingdom, Germany, Belgium, Taiwan,
Burma, United States, Russia, Indonesia, Vietnam, and Netherlands. meet the changing demands of modern in terms of access to bank finance will
consumers. probably continue to be accommodative.
iv Emerging Trends in Real Estate® Asia Pacific 2020 Emerging Trends in Real Estate® Asia Pacific 2020 vChapter 1: Defying Gravity?
Asian REIT markets have rebounded
in 2019, as interest rates in the United
This year’s investment prospect rankings
again reflect investor preference for
in all areas. While placing significant
amounts of capital in Vietnam remains
“We need to be a little bit more cautious in investing in APAC, particularly in
States began to decline. Many REITs in regional markets that are large, liquid, and problematic given the relatively small size areas of the economy that are going to be impacted by U.S.-China trade
the region, and especially in Singapore,
are now on acquisition sprees to take
defensive—Singapore, Tokyo, Sydney, and
Melbourne therefore figure strongly. This
of local markets and a general shortage
of investment-grade assets, it is receiving
relations.”
advantage of the lower cost of capital for is partly a reflection of a flight-to-safety strong inflows of capital as a result of
new purchases, as well as an anticipated mentality resulting from growing concerns incremental shifts of manufacturing
upswing in investor interest in yield- about a global economic downturn. In capacity away from China. Remarkably,
bearing stocks, including in particular from addition, though, these are all markets Ho Chi Minh City this year, also ranked
investment funds, which have become offering significant numbers of core assets as the top city for all asset classes in this While investors across the Asia Pacific Emerging signs of a potential recession
more willing to buy into REITs as opposed that are the preferred targets of regional year’s buy/hold/sell tables. region are notably more cautious about in the U.S. economy have only added to
to fixed assets. institutional investors that today constitute market prospects than in previous years, concerns. In a September 2019 report,
the biggest driver of new demand for the jury remains out on whether the top analysts Oxford Economics stated: “Of
The first domestic Indian REIT listed in assets. has been reached or breached. What’s seven indicators that have been strongly
2019. Its shares were rapidly bid up in certain, though, is that concerns today associated with global recessions over
value until by the end of 2019 its implied While investor sentiment towards local are greater than ever. As one interviewee the last 45 years, only two are currently
yield had compressed to under 6 per emerging markets is now on the wane due commented: “I have been cautiously sending recession signals. However, one
cent—a remarkably low level for a market to global economic concerns, Ho Chi Minh optimistic for years—now I’m just of these two—the U.S. yield curve—has
where risk is perceived to be high. City received consistently strong feedback cautious.” And as an investment manager the best predictive record and tends to
in Australia noted: “For the past five or six send the earliest warning.”
years I’ve probably sounded like a broken
record, but it is a little bit different this Recent statistics add to the sense of
year.” unease. Respondents’ expectations of
profitability declined in this year’s survey
Notice to Readers The biggest single factor, as cited by to an eight-year low, while data from
Emerging Trends in Real Estate® Asia Pacific is a trends and forecast publication now in its 14th edition, and is one of the most respondents to our Asia Pacific survey, analysts Real Capital Analytics (RCA)
highly regarded and widely read forecast reports in the real estate industry. Emerging Trends in Real Estate® Asia Pacific 2020, is the impact of the ongoing U.S.-China show a 20 per cent decline in year-on-
undertaken jointly by PwC and the Urban Land Institute, provides an outlook on real estate investment and development trends, trade friction, which is being felt across the year transaction volumes through the first
real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues throughout the Asia region as the Mainland economy slows. half of 2019, together with a fall in rolling
Pacific region.
Emerging Trends in Real Estate® Asia Pacific 2020 reflects the views of individuals who completed surveys or were interviewed
as a part of the research process for this report. The views expressed herein, including all comments appearing in quotes, are
Exhibit 1-1 Asia Real Estate Transaction Volumes by Source of Capital
obtained exclusively from these surveys and interviews and do not express the opinions of either PwC or ULI. Interviewees
and survey participants represent a wide range of industry experts, including investors, fund managers, developers, property
companies, lenders, brokers, advisers, and consultants. ULI and PwC researchers personally interviewed 94 individuals and survey
responses were received from 463 individuals, whose company affiliations are broken down below. Domestic Intra-Asia Investment into Asia % Cross-border
Private property owner or developer 26% 60%
Real estate service firm (e.g., consulting, financial, legal, or property advisory) 23%
Fund/investment manager 21% 50%
Homebuilder or residential developer 10%
Investment into Asia (US$ billion)
Institutional equity investor 3%
Bank lender or securitised lender 1% 40%
% Cross-border
Other entities 15%
30%
Throughout the publication, the views of interviewees and/or survey respondents have been presented as direct quotations from the
participant without attribution to any particular participant. A list of the interview participants in this year’s study who chose to be identified
20%
appears at the end of this report, but it should be noted that all interviewees are given the option to remain anonymous regarding their
participation. In several cases, quotes contained herein were obtained from interviewees who are not listed. Readers are cautioned not to
attempt to attribute any quote to a specific individual or company. 10%
To all who helped, the Urban Land Institute and PwC extend sincere thanks for sharing valuable time and expertise. Without the 0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
involvement of these many individuals, this report would not have been possible.
2012 2013 2014 2015 2016 2017 2018 2019
Source: Real Capital Analytics.
vi Emerging Trends in Real Estate® Asia Pacific 2020 Emerging Trends in Real Estate® Asia Pacific 2020 1Chapter 1: Defying Gravity?
12-month volumes from the record levels Exhibit 1-2 Most Active Asia Pacific Metros H1’19 Geopolitics: the Good, the as a spike in supply. Having said that, investment values. According to a locally
seen in mid-2018. In both China and Bad, and the Ugly the biggest occupiers in Shanghai are based investor who acts for a number of
Japan, quarterly volumes fell to the lowest domestic companies, and the refocusing large institutions and sovereign wealth
levels in a decade, as both domestic and Historically, real estate investors prefer to of the economy from exports to domestic funds, “A couple of the big sovereign funds
cross-border investment slumped. focus on bottom-up rather than top-down demand–driven activities will mop up called to ask if this is an opportunity, but
2018 H1 ’19 Metro Grand Total ($m) % YOY
macroeconomic factors. Hence: “location, that supply relatively quickly. So, there I had to tell them, essentially, that no one
1 1 Hong Kong SAR $10,637 –46%
Not all indicators are negative, however. location, location” trumps “events, my dear could be a short window to buy.” RCA is selling. Apartment owners may panic-
2 2 Tokyo $9,719 –19%
Indeed, there seem to be few signs of boy, events.” data show Chinese transaction volumes sell, but you’re not going to see anything
3 3 Seoul $8,357 –2%
regional economic instability that might 6 4 Beijing $5,839 138% falling by 19 per cent year-on-year to $15 on the commercial side. The sentiment is
trigger a widespread downturn. Inflation Nonetheless, political upheaval has billion in the first half of 2019, with a more wait and see—if they don’t have to close
4 5 Sydney $5,763 17%
is in check, financial systems appear become a common theme across the dramatic 39 per cent fall in the second a deal, they’re not going to close, but
7 6 Singapore $4,884 73%
well capitalised, and global interest rates 5 7 Shanghai $4,572 –2%
world in 2019. U.S.-China trade friction quarter. Given that domestic players have basically, the Singaporeans and Koreans
remain at or near all-time lows. 8 8 Melbourne $2,821 –14%
may be the obvious harbinger of doom, been handicapped by restricted access to see it as just a blip—no one is expecting
10 9 Osaka $2,007 165%
but it is hardly the lone red flag. Japan capital, foreign buyers are now especially carnage.”
According to one fund manager: “In 21 10 Shenzhen $1,257 1,233%
and South Korea are also engaged in a active in the market.
most asset classes, you have reasonably 26 11 Tianjin $1,237 295%
renewed political spat, while a series of Going forward, there was also a
decent operating fundamentals in terms 9 12 Brisbane $1,217 –21%
street protests over a number of months In Hong Kong, meanwhile, the impact consensus that Hong Kong is unlikely to
of occupancy levels and demand. There 15 13 Mumbai $1,074 –23%
have also flared up in Hong Kong, of street protests has begun to be felt in suffer an exodus of businesses to other
is a limited amount of new supply, 11 14 Taipei $679 –33%
wreaking havoc on the city’s retail and earnest. Tourist arrivals were down 40 destinations. In particular, the prospect of
credit growth to the sector has been 13 15 Yokohama $503 –56%
hotel sectors. per cent year-on-year in August, hotels Hong Kong’s financial industry migrating
reasonable, [and] lending standards for were on average only half full and, in the to locations such as Singapore or
new construction have been responsible. What are the consequences from retail sector, one major landlord reported Shanghai is seen as unlikely due to the
Those are all typically the areas that a real estate point of view? While same-store sales down 50 to 90 per cent continuing advantages offered by Hong
Source: Real Capital Analytics.
would precipitate some sort of cyclical undoubtedly negative for the markets, over the same period. That said, the office Kong’s reliable legal system, its low tax
downturn.” the current dislocations are also creating sector has emerged largely unscathed. rate, and its proximity to mainland China.
opportunities. In China, for example, the Although central business district (CBD) Given that the Mainland’s capital account
Other indicators are also supportive. As Exhibit 1-3 Real Estate Firm Profitability Trends trade friction has followed hard on the vacancies were up and rents were down is unlikely to open up, Shanghai will remain
one investor pointed out: “Real estate still heels of an ongoing regulatory crackdown marginally, there has been little effect on unable to compete as a major finance hub.
feels like an attractive asset class vis-à-vis on alternative finance products as well
bond yields and where interest rates are.” as a general tightening of credit imposed
According to another, liquidity is also a by the central bank. Interviewees based
Exhibit 1-4 Most Problematic Issues for Real Estate Investors
factor: “We’ve been at the top now in Asia in China warned that the malaise was
for about five years, and every year we sit starting to gain traction. In the words of
down and say, ‘Well is this it, are we now one private-equity investor, the economy
Excellent “is getting hit harder than people outside
ready for a correction?’ And then all these Trade wars 6.64
people rock up with billions of dollars to China realise.”
spend on Asian property and of course Low yields 6.32
they support values.” As a result, for many multinational
Good corporations (MNCs), expansion plans Global economic growth 6.12
Meanwhile, DWS research projects are now on hold. “They’re more treading Asian economic growth 6.00
unlevered aggregate total returns for core water than anything else, which certainly
Asia Pacific real estate to range between impacts commercial office leasing,” one Lack of investable properties 5.85
Fair
5.5 per cent and 7.6 per cent annually China investor said. However, “If you look
Currency volatility 5.84
from 2019 to 2023, well below the 2018 at the market as a whole, the growth story
figure of 10 per cent. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 is still very much about the tech sector, Competition from Asian buyers 5.74
and Chinese tech firms are doing very
well. They are absorbing a lot of space. Competition from global buyers 5.22
Cost of finance 4.36
Source: Emerging Trends in Real Estate Asia Pacific 2020 survey. According to a different fund manager,
“There is clearly an impact in the Impending interest rate hikes 4.04
Shanghai and Beijing markets. Shanghai,
in particular, has recently had quite a 1 2 3 4 5 6 7 8 9
Least Neutral Most
bit of office development – so you have problematic problematic
shrinking demand from MNCs nervous
about the trade friction at the same time
Source: Emerging Trends in Real Estate Asia Pacific 2020 survey.
2 Emerging Trends in Real Estate® Asia Pacific 2020 Emerging Trends in Real Estate® Asia Pacific 2020 3Chapter 1: Defying Gravity?
Singapore, meanwhile, is too far away Trade Friction: Winners and One result of this migration is that space and metro, so the traffic is surmountable, Exhibit 1-5 Projected Change in Economic Factors, Next Three to Five Years
to be a major player, offers minimal cost Losers in emerging-market logistics and business and of course liquidity in Bangkok is the
savings compared with Hong Kong, and parks “has been selling like hot cakes”, best, in terms of buying and selling real
struggles with a number of challenges Another way that trade friction is altering as investors scramble to find a home for estate generally. As companies become
of its own, including difficulties obtaining regional investment patterns relates to the new factories. Industrial real estate rents more fly-in fly-out, and as there’s a lot Worsen No change Improve
working visas for staff. migration of manufacturing capacity out rose by double digits year-on-year in the more regionalism, a high-cost base like
of China. This shift had been underway first half of 2019 in several Vietnamese Singapore, especially with its tightening
for several years, but tariff hikes have
Global economic growth
Still, with so much capital circulating in the provinces, according to Savills research, visa requirements and high home prices,
region, certain markets probably stand now accelerated the process. While the including 54.6 per cent in Binh Duong and make places like Bangkok an interesting Construction costs
to benefit. Little new capital is finding its amount of capacity leaving China is still 31.1 per cent in Tay Ninh, northwest of option as a base.”
way to China, for example, which must small relative to the total, even a minor Ho Chi Minh City. With incoming foreign Asian economic growth
therefore be heading elsewhere. As one shift in a market as big as China can have investment, meanwhile, rising 69.1 per
fund manager said: “I think at the margins, a major impact on the emerging-market cent to US$16.74 billion in the first five Competition from Asian buyers
people hesitant to put money to work in economies where most of the outgoing months of the year, Vietnam is now well-
mainland China and Hong Kong SAR will capacity is now heading. So far, the prime entrenched as the favoured China-plus- Yield compression
perhaps be even more focused on Tokyo beneficiaries have been South East Asian one model.
and Australia. And maybe Singapore is economies, although some countries have
Cost of finance
also a net beneficiary of what’s going on benefitted more than others. According Another result is that Bangkok is now
in China.” to one interviewee: “Over the past year, of figuring increasingly as a candidate for Availability of investable properties
the 25 major industrial refugees that have multinationals’ regional headquarters.
left China, most have gone to Vietnam, According to one executive active 0% 20% 40% 60% 80% 100%
Thailand, or Myanmar.” Indonesia has throughout South East Asia, “Thailand is
so far seen little activity, and the same featuring more and more in people’s minds
applies to the Philippines. This is because, just because executives like being in
although “they’ve been poking around, Source: Emerging Trends in Real Estate Asia Pacific 2020 survey.
Bangkok. The quality of lifestyle products
they’re very used to competing on tax for their families is abundant, people have
incentives, and that’s where Vietnam gotten used to commuting by the Skytrain
trumps the Philippines, despite having a
more opaque legal contract system.”
China: Key Themes
Despite a slowing economy, concerns A few years ago, foreign investors often loosening has been allowed for small and for developers, investors, and consumer buyer of a mixed-use development site growth prospects, but it is not likely to
over ongoing trade friction, and a tighter had trouble landing deals in China’s medium-sized companies. “We’re still buyers and introduced price controls for will be able to sell the residential element achieve the growth levels it has been
regulatory environment, more and more primary cities. Today, however, the seeing a very tight lending market towards residential properties in some cities, has as usual, but must continue to hold the historically achieving. We are probably
overseas investors are beating a path number and size of such transactions real estate, [and] as of right now, I don’t led some investors to take a cooler view commercial part of the development more enthusiastic about areas or assets
to Chinese real estate markets. First-tier have increased significantly. “I think there’s see that changing,” one developer said. of China. However, the logistics sector for 10 years or more after construction within the Chinese economy that face
cities, and especially Shanghai, are today been a dramatic shift over the last few continues to be a favourite. According to is complete. This naturally makes life domestic consumption.”
regarded as gateway destinations where years,” one investor said. “Historically, The Chinese office sector has been the one overseas investor: “We are looking at difficult for fund managers, unless they are
the largest global institutions feel they the Chinese [imposed] tight controls over asset class hit hardest by the trade friction, some logistics deals in China. There’s still investing in conjunction with a source of
must have a presence as they diversify foreign capital entering the market, and although investors continue to selectively a massive undersupply of good-quality long-term capital. As a result, “we’ve been
their portfolios. it was very difficult to compete against target assets in the biggest destinations. stock, and it’s hard to get the land. It moving to more brownfield, value-add
the locals. Clearly, as the economy has According to one fund manager, “We takes years to line those deals up, but projects,” one fund manager said. “The
Commercial real estate transaction started to slow, you have less aggressive prefer to invest in the first-tier cities, where they certainly seem to lease well and requirements on greenfield development
volumes in China hit a record high US$25 domestic capital and a weaker Chinese we tend to see higher levels of growth, quickly once they’re built. There is massive are becoming onerous for anyone
billion in the first half of 2019, according to currency, but there is also a desire from greater levels of liquidity, and larger domestic growth in consumption, which investing via a fund.”
JLL. The results were driven by a bumper Beijing to see more foreign capital come opportunities. Cities that have the most is supporting logistics, the trade war
first quarter, with investment volumes into China.” innovative companies, particularly oriented notwithstanding.” Finally, a number of interviewees predicted
rising 174 per cent year-on-year to some towards the technology sector, are where that the days of “easy growth” have
US$17 billion. As usual, most activity was A further boost for foreign investors has you have the highest growth. A notable change in markets in first-tier already ended in China. According to one
focused on Shanghai, which saw US$10.9 been Beijing’s reluctance to slacken cities has been requirements in public investor: “We still want to invest; however,
billion of transactions, making it the fourth- lending restrictions for domestic real The current regulatory environment, land auctions insisting that buyers agree we do have to be cognizant of the fact
most-liquid city in the world, behind only estate buyers, even though some which has tightened access to capital to long-term ownership. For example, the that growth is slowing. China has fantastic
New York, Tokyo, and Paris.
4 Emerging Trends in Real Estate® Asia Pacific 2020 Emerging Trends in Real Estate® Asia Pacific 2020 5Chapter 1: Defying Gravity?
More Caution, More Core Exhibit 1-6 Top Eight Metros Areas Share of APAC Volume
Beijing, and Sydney—all large markets with Yields Begin to Rise . . . per cent as of June 2019, the outward
core assets. According to one investor, move may be attributed to social tensions.
The reluctance to declare a downturn “We’ve been super defensive for the past For the past four or five years, real estate
But yields have also begun to expand in
does not mean that Asia Pacific real three years, just looking at things where professionals across many markets have
major markets such as Melbourne and
estate investors have their heads in the there is really strong local demand and been wearily sucking their teeth and
Tokyo. Whether this turns into a trend
sand. More and more, they are turning 80% that are very, very affordable.” declaring that cap rate compression
remains to be seen, but as one interviewee
to defensive strategies in order to hedge cannot go on. So far, however, they have
noted: “I can’t see cap rates getting
against a potential reversal. Another said, “We have become extremely been wrong, with transaction yields
lower. I know the U.S. has cut interest
disciplined in terms of underwriting and continuing to drop incrementally or at least
rates, but I really cannot see any sensible
One way of doing this is to hold onto making sure the rental growth profile is remain compressed.
70% opportunities for cap rates to [continue to]
investments longer. Our 2020 survey something that we validate extensively. come down.”
confirms a steady decrease in shorter- We also need to be focused on costs More recently, however, office yields in
term plays over the last five years and a such as tenant incentives, capex [capital some markets have begun to turn. In Hong
corresponding increase in longer-term expenditures], and maintenance.” Kong, where cap rates moved out 35 basis
investment horizons, with more than twice 60% points from their 2018 lows to reach 2.6
as many respondents (i.e., 24 per cent)
indicating an intention to hold for 10 or
more years compared with 2016 data. To
Spreading the Load Exhibit 1-8 Asia Office Yields
an extent, this phenomenon also reflects
the increasing volumes of institutional 50% Another way to reduce risk is to share it
’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19
money now looking for an investment with others. Larger players are therefore
home. increasingly willing to structure deals as
Source: Real Capital Analytics.
partnerships, and are even turning to Hong Kong SAR Singapore Seoul Sydney Melbourne Tokyo
According to one fund manager, “Over funding investments as a way to diversify.
the next 12 to 24 months, we would like JLL reported that Asia Pacific investors
to rebalance a little bit by doing more core racked up some $13 billion of joint venture 10%
Exhibit 1-7 Time Horizon for Investing
investments, buying a steady stream of transactions in the first half of 2019, after
cash flows with a long weighted-average an equally busy 2018. “These deals help
lease length and downside protection. So, investors access prime assets with large
8%
even if there is a correction, we still have 2020 2019 2018 2017 2016
lot sizes and also reduce concentration
those cash flows coming in and are not risk,” according to one investment adviser.
dependent on capital gains.”
Joint ventures and club deals are 6%
There is also a flight to quality in terms of 1–3 years particularly favoured in China, where a
location. RCA data show that since the number of recent deals have resulted
third quarter of 2017, investors’ caution, in partnerships between domestic and 4%
expressed by their preference for core international investors, often involving
markets, has been rising (see Exhibit multiple partners. Anecdotal evidence,
1-6). “Investors generally are probably a however, also suggests that some larger
3–5 years investors, who in the past have been 2%
little bit more cautious on opportunistic
more inclined to target joint ventures 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
[investing] and leaning a little bit more
towards core strategies because of their or club deals, are beginning to invest
concerns around valuation and risk. So in funds once more. According to one
they are orienting a little bit more towards fund manager, “We hear that some
5–10 years Source: Real Capital Analytics.
lower-risk strategies and probably a little investors that you don’t think of as fund
bit away from more cyclical asset classes, investors are going into multiple funds. We
like hotels, and more towards less risky understand this is partially to reduce risk
assets,” one investment manager said. but also a way to gather information—if
you are investing with five fund managers,
This assertion is also backed by the data. 10–plus years you have five research departments and
RCA statistics for the first half of 2019 acquisitions teams to tap into.”
show a 39 per cent fall in hotel investment
volumes. The top metropolitan areas for
0 10 20 30 40 50
real estate transactions in the first half
of 2019 were Hong Kong, Tokyo, Seoul,
Source: Emerging Trends in Real Estate Asia Pacific 2020 survey.
6 Emerging Trends in Real Estate® Asia Pacific 2020 Emerging Trends in Real Estate® Asia Pacific 2020 7Chapter 1: Defying Gravity?
. . . But Not Everywhere In any event, the mild unwinding of cap because no one can find a home for the Focus on FX natural alternative to conventional hedging dramatic movements. You can do well
rates seen in some locations still leaves capital, so you’re finding extraordinarily strategies. Overseas investors also tend to at the property level and then lose it on
This reversal in cap rates is hardly prices very much on the risk side of the low cap rates for assets that are, frankly, Instability in global currency markets borrow in local currencies in order to gain the currency. Generally speaking, it is so
universal, however, and in some locations, risk/return spectrum as too much capital an opportunistic play. And that’s the funny means that exchange rates and foreign a partial hedge. expensive to hedge that it takes a massive
yields have continued to compress. continues to chase too few assets. “The thing about it. In a lot of cases, you should exchange (FX) hedging strategies are knock off your returns and, until you have
weight of capital has readjusted all the be saying, “Time to hit the door.” becoming increasingly important for In some cases, FX hedging can have some certainty about when your money is
In India, for example, some observers returns,” as one Singapore-based fund returns. a significant positive effect on returns, coming out, it is difficult to actually hedge
see substantial compression of high-end manager said. “It has mispriced risk depending on the currency pairing. For it effectively.”
office yields as the economy continues According to one European investor, example, as of mid-2019, Singaporean
to mature. “I think India is the next big currency is “an important factor in every capital received much stronger currency The most notable trend in the past 12
growth story—in the same way we saw transaction, [but] now the impact can vary. returns in Europe or Japan than it did in months has been the strength of the U.S.
one-off yield compression in China over Exhibit 1-9 Office Sector Cap Rates, Core Locations H1 2019 It is huge in certain places like India, [while] Australia. As one adviser commented: dollar, particularly compared with the
the last 15 years, we’ll [also] see one-off there is a lower impact in places like Japan “There is a strong FX arbitrage for Asian Indian rupee, the Australian dollar, and the
yield compression in India.” This is the and Singapore.” investors into Europe at the moment and Chinese yuan.
major reason India is so popular amongst [also] from the U.S. into anywhere else.”
those deploying patient long-term capital. Approaches to currency hedging vary
Income-producing Indian properties are Country City Range Outlook widely. Broadly speaking, European, South Nonetheless, currency movements can
now in huge demand—so much so that Australia Sydney 4.00–5.00 Korean, and Japanese investors are more make life difficult. According to one
investors are sometimes willing to enter Melbourne 4.25–5.00 inclined to hedge, while very large global investor, “Currency is becoming more
into forward purchases of Indian assets investors tend to adopt diversification as a of a factor because we have had some
with strong developers in popular locations Brisbane 4.75–5.75
such as Hyderabad and Bangalore. Perth 4.75–6.50
New Zealand Auckland 5.00–6.50
According to one locally based consultant, Exhibit 1-10 Internal Rate of Return Impact to Investor Returns Using Cross–Currency Swaps
Wellington 5.50–7.50
eight to 10 (mainly foreign) investors
are now competing for each income- China Beijing 3.00–4.50
Home currency (investor capital from…)
producing asset brought to market. Shanghai 3.00–4.25
“Bidding wars normally start at around 8.5 Hong Kong SAR Japan Mainland China Singapore South Korea Europe Australia U.K. U.S.A.
Guangzhou 3.75–4.75
to 9 per cent and we’ve seen numbers go (HKD) (JPY) (CNH) (SGD) (KRW) (EUR) (AUD) (GBP) (USD)
even tighter to 7.5 per cent. From a global Shenzhen 3.50–4.50
Hong Kong SAR
N/A –2.06% 0.91% 0.01% –1.14% –2.02% –0.43% –0.81% –0.03%
investor’s perspective, this may not seem Hong Kong 1.50–2.80 (HKD)
too bad, but given the risks Indian markets
Japan Tokyo 2.20–3.50 Japan
1.99% N/A 2.91% 2.01% 0.87% –0.02% 1.58% 1.19% 1.97%
have, I think people are overexcited.” (JPY)
Property currency (investing into…)
Osaka 2.80–4.00
Mainland China
Meanwhile in Australia, recent interest South Korea Seoul 4.00–5.00 (CNH)
–0.92% –2.96% N/A –0.90% –2.04% –2.93% –1.33% –1.72% –0.94%
rate cuts, combined with continued rental Singapore Singapore 3.00–3.75 Singapore
growth in the Sydney office market, have –0.03% –2.07% 0.90% N/A –1.14% –2.03% –0.43% –0.82% –0.04%
(SGD)
led some to suggest that further cap India Gurgaon 8.00–8.75
South Korea
rate compression is on the cards. The Mumbai 8.00–8.75 (KRW)
0.88% –1.16% 1.81% 0.91% N/A –1.12% 0.48% 0.09% 0.87%
reason, according to a Sydney-based Bangalore 8.00–8.75 Europe
fund manager, “is historically strong (EUR)
1.96% –0.08% 2.88% 1.98% 0.84% N/A 1.55% 1.17% 1.94%
occupational markets with a macro overlay
Australia
of interest rates being lower for longer—the (AUD)
0.39% –1.65% 1.31% 0.41% –0.73% –1.62% N/A –0.41% 0.37%
10-year bond rate is below 1 per cent
Source: CBRE. U.K.
now.” (GBP)
0.75% –1.29% 1.67% 0.77% –0.37% –1.26% 0.34% N/A 0.73%
U.S.A.
0.02% –2.02% 0.94% 0.04% –1.10% –1.99% –0.39% –0.78% N/A
(USD)
Source: JLL.
8 Emerging Trends in Real Estate® Asia Pacific 2020 Emerging Trends in Real Estate® Asia Pacific 2020 9Chapter 1: Defying Gravity?
Japan: Key Themes
In developing Asian nations, the Interest in office assets is buoyed by High prices in the office sector have seen Osaka, and Nagoya have been unchanged modern warehousing stock has provided “Fifteen years ago, these were secondary
fundamentals of demographics and “super-strong fundamentals,” according many investors turn to the multifamily for 16, 12, and six quarters respectively, bumper opportunities for developers and cities where you could chase yield, but
economic growth underpin real estate to one private-equity investor. “It’s been residential space over the last few years, according to CBRE research. However, investors. Nor is there any sign of the there was always an underlying problem
investment and—for investors active in impressive to see the steady demand for but competition for assets has driven there are pockets of growth: Ginza, logistics boom ending—vacancy rates of liquidity. However, Osaka, Nagoya, and
those markets—outweigh short-term office—I think that’s surprised most people cap rates to levels that some see as Tokyo’s prime shopping district, is seeing in the core markets of Greater Tokyo, Fukuoka repositioned themselves after
difficulties and barriers to entry. In Japan, because there’s been substantial supply prohibitive. According to one Tokyo-based rising rents and interest from investors. Osaka, and Nagoya have been declining, the financial crisis and expanded their
the situation is precisely the opposite: in 2018 and 2019. But that’s pretty much investor, “The pricing is so tight we’ve according to CBRE, with vacancies in the economic base. I don’t think these cities
gross domestic product (GDP) growth been spoken for, so the office market in stopped looking at residential. We still see According to one investment manager, Tokyo Bay Area falling to zero in 2019 for are secondary anymore—they’re just not
has rarely reached 2 per cent in the past Tokyo is still very promising.” it coming across, but Tokyo is trading in “People are looking for high street the first time since 2008. Tokyo.”
five years, and the country has probably the low 3s [i.e., 3 per cent].” With some retail, but it is not really available.
the worst demographic outlook of any However, strong activity by Japanese properties selling at a higher per-square- Domestic [players], especially the trading “Whether you are looking at assets Major provincial cities still offer higher
nation in the world. Nonetheless, Japan REITs and the continuing dominance of metre price than brand-new condos in the companies, continue to be the most focused on e-commerce, or just general yields than Tokyo; while office cap rates
continues to be a popular destination large domestic developers over high-end same submarket, operating incomes are aggressive buyers, picking up whatever logistics, there is a lot of life in the sector in the capital are now between 3 per cent
among large investment funds. It offers office space mean that pickings are slim further reduced once leasing, renovation, they can. But there’s also concern over the and the price is still making sense when and 3.5 per cent, the equivalent in Osaka
liquidity, a large base of investable assets, for all but the best-established foreign and turnover costs are factored in. “So, consumption tax going up and whether you can buy in the mid-4s as opposed to and Nagoya might offer 50 to 75 basis
and easy access to nonrecourse bank players. “We are trying to find stuff in the if you’re buying a 3-cap [rate], you’re that will be sustainable, particularly if the low 3s,” according to one interviewee. points in additional yield.
finance at rates that still come in at less market, but we just cannot find enough probably looking at a 2.5 on a net cash tourism tails off because of the [problems]
than 100 basis points, despite moderate to buy,” said one fund manager. “The flow basis.” with South Korea and China.” Difficulty placing capital in Tokyo is leading
tightening over the last couple of years. [foreign] guys who bought office have sold growing numbers of investors to look
most of it, so the sellers are domestics Despite rising tourist numbers, the outlook Although Japanese shoppers remain to other domestic markets as sources
Overall investment volumes have been and they’re selling to other domestics.” for Japanese retail property is somewhat seemingly immune to the appeal of of more affordable deals. “The liquidity
slowing for the past 12 months, but asset flat: average prime retail rents in Tokyo, e-commerce, the structural shortage of has improved,” said one fund manager.
performance remains strong. Both the
office and residential sectors continue to
see yield compression.
Pockets of Distress with access to a credible capital partner that all but the largest players are having Other opportunities for distress relate to is likely to worsen after the Olympics, less
will survive. Developers are struggling for problems accessing capital. Particularly overcapacity. In Japan, for example, the savvy owners and operators could run into
Although in general, high prices and survival.” As a result, distress plays are at risk are overstretched operators in the tourism sector has been a huge success trouble before that.
compressed yields remain the norm, signs becoming a major opportunity. A newly residential leasing and coworking sectors, story over the last few years. That may
of stress have emerged in a few markets, introduced bankruptcy code means that both of which have already seen business have been too much of a good thing, Further opportunities exist in Vietnam,
caused in particular by a lack of access more assets are being auctioned off by failures. however—overbuilding in the hotel sector which suffers a perennial problem from
to capital. In India, for example, while banks at a discount. is already creating distress situations. overbuilding in the condo sector, and
the office sector is a runaway success, While some see a major opportunity, also in Australia, where Chinese buyers
residential developers are in a downward Still, the prospects of structuring such predicting “massive failures,” others If Japan’s current diplomatic quarrel with of residential development sites in recent
spiral. A government crackdown on investments using debt may be even are more sanguine. According to South Korea is not resolved, distress years bid heavily to buy land but today
banking-sector malpractice, combined more appealing. “Anyone coming to one Shanghai-based fund manager, may become worse, given that nearly a are sometimes unable to source capital to
with growing credit risk among India saying, ‘I have capital to deploy for “I see a lot of people talking about quarter of Japan’s 2018 tourists came complete their projects. One local private
developers, has seen banks pull the plug distress’ should be able to make equity- it, but I hardly see any deals, for a from that country. According to one equity investor said that his company had
on real estate lending. With the nonbank like returns doing senior structured last-in, couple of reasons. First, these kinds of Tokyo-based fund manager, “You have been active in the “for-sale condominium
financial sector in similarly dire straits, first-out senior debt, with potential for IRRs opportunities are complicated. If it’s really a lot of construction, and a lot of these market, where there’s been a lot of
developers now have nowhere to turn for [internal rates of return] in the region of 22 distress, it involves lawsuits, foreclosure hotels have unsophisticated owners and overbuilding, the capital market flow is
finance. to 24 per cent”, continued the consultant. arrangements, and negotiations, so it’s small, undercapitalised management disrupted, and the financing market is
“So far, few people have woken to that hard to close. And the other reason is that companies that are in on either a lease or disrupted. That’s creating an opportunity
In July 2019, a report by investment bank opportunity and just a handful of funds people are still not desperate enough. With an operating agreement, but they will not we’re taking advantage of.”
Goldman Sachs predicted that 70 per have entered the market.” the Chinese government already talking have the ability to perform. These guys
cent of Indian developers could go out about relaxing money supply by cutting have been backed but can’t service the
of business within the next two years. In China, meanwhile, a government bank reserve ratios and other measures, debt. So, I think going forward there’s
“These are painful times,” one Delhi-based crackdown on nonbank lending, together it’s hard to see it getting worse.” going to be opportunity once there’s a bit
consultant said. “The whole game is with new central bank rules tightening of distress in tourism.” While the problem
going to become redefined; only people access to real estate borrowing, means
10 Emerging Trends in Real Estate® Asia Pacific 2020 Emerging Trends in Real Estate® Asia Pacific 2020 11Chapter 1: Defying Gravity?
Sustainability: Coming of Age According to one fund manager, “To environmental policies and performance, Coworking: Does It Work? Exhibit 1-11 Penetration of Coworking Operators in Asia Pacific Cities
get investor funds, you need to have with data then made available for use by
Over the last decade or so, interviewees a real ESG [environmental, social, and investors to support their allocations of The failed initial public offering (IPO) of
in the Asia Pacific region have spoken corporate governance] programme and capital. the world’s largest coworking company
wistfully about efforts to improve the platform. When we see RFPs [requests in September 2019 has forced investors
efficiency of their buildings: green was for proposals] come in, there’s a huge “GRESB gives investors a number,” said globally to reconsider the risks relating 6% 6% 6%
good, but all too often they were deterred ESG section. From our perspective, you one subscriber to the programme. “They to the structuring of the industry’s lease
by the perceived costs of upgrading. need energy efficiency as one of the key can see that firm X scores 86 and firm agreements. Usually, operators obtain
Today, though, a threshold of sorts requirements of any asset, simply because Y scores 50 and they can point to firm space from landlords on long-term leases 4.6%
appears to have been crossed. For the capital markets are going to start X being better. They don’t even need to (often including long rent-free periods,
3.9%
developers, owners, and occupiers of discounting it if that stuff is absent.” know how. And, of course, it makes you nonrecourse terms, and commitments 3.7%
3.5%
prime real estate, sustainability is now look worse if you’re not in GRESB.” from landlords to undertake costly fitouts)
3% 3%
intrinsically linked with quality; it is hard to The other catalyst is the need for that is then sub-let to their own end users
imagine a worthy grade A office building regulatory compliance. Requirements vary One frustration for ESG advocates is the on a short-term basis. This mismatch
not rated under the Leadership in Energy means that operators at risk of losing 2%
from government to government around difficulty in demonstrating a causal link 1.4% 1.5%
and Environmental Design (LEED) or some the region, with Australia and Singapore between ESG initiatives and improved tenants in the event of a downturn will
other local certification scheme. seen as the strongest promoters of asset performance. However, according still be bound by the terms of their own
environmental sustainability, and smaller to one interviewee, “If you look at the (longer) leases with building owners (who
According to one global investor, “For developing markets having less imposing investor-led indices and benchmarks, are in turn exposed if an operator goes
all our office investments, we are now rulebooks. That said, buildings in better risk-adjusted returns are linked to a out of business). In addition, the extent
Tokyo
Melbourne
Sydney
Hong Kong
Mumbai
Bangalore
Delhi NCR
Seoul
Singapore
Shenzhen
Beijing
Shanghai
required to have some sort of green emerging markets are often some of the broader management of ESG issues.” of the losses disclosed in the abortive
SAR
certification, and we are happy to spend least efficient, meaning they have more to IPO now raises further questions. In
the money required to achieve it because gain by introducing efficiency measures, particular, is the industry’s business model
we consider it [both] a differentiator and even without mandatory measures. sustainable over the long term? And, more
downside protection.” important in the short term, will operators
In any event, larger real estate players still be able to raise equity and debt in an
Source: CBRE Research, May 2019.
The drivers for this are twofold: capital expect more regulatory control in this area environment where so few operators are
and regulatory. On the one hand, there as governments fall increasingly in line currently profitable and competition is only
is growing awareness that upgrades to with the Paris Accord, which aims towards increasing?
building infrastructure can create real net-carbon-neutral economies. “The big
financial value—either through reduced Given the sheer volume of coworking As a result, landlords are now changing This type of relationship is becoming
risk,” said one investment manager, “is
costs such as electricity, or through higher space now on the market, these risks the way they contract with coworking increasingly common in the United
that you buy something now that will fail
rents. According to one investor involved apply not only to coworking operators, occupiers as they seek to reduce their risk. States. According to an executive of one
the regulations or the requirements of
in fitting out a building in Kuala Lumpur, but also to building owners and potentially “We are shying away from leasing out the U.S.-based coworking operator who
investors some way down the line. In three
“You’re looking at cloud management and also banks that have financed the whole building [to operators],” continued has negotiated numerous such deals,
or four years’ time, you might find that you
very sophisticated artificial intelligence purchases of buildings in which there the fund manager. Instead, “we may give “The landlord is now our client, so we’re
can’t lease it or sell it because it doesn’t
that can optimise the running of the are large concentrations of coworking a third or a quarter of our space to them, structuring these top-line revenue-share
have the environmental credentials.”
building in terms of things like predictive facilities. According to CBRE, the total and then try to include more covenants, structures or profit-share structures where
maintenance, occupancy usage patterns, office footprint of coworking operators in requiring a big deposit or guarantee.” landlords put up the majority of capital,
There is also growing pressure on this
and optimisation of temperatures using a the Asia Pacific region has risen more than but get a premium to the market rent.
front from multinational occupiers,
number of different data points, including 300 per cent since 2016, reaching some Another way the flexible space dynamic For example, in New York our rent is $64
although the environment in the Asia
satellite weather forecasting.” 54 million square feet as of March 2019. is changing is through the emergence per square foot, but we’re rerenting that
Pacific is not currently as demanding as
The industry now occupies more than 3 of landlord/operator partnerships, with space for $380 per square foot. So, we
in the West. According to one adviser:
In addition, private-equity investors, large per cent of office supply in the Asia Pacific operators looking to secure management say to the landlord, “You’re missing out on
“Elsewhere in the world, we are starting to
real estate investment trusts (REITs), and region, compared with 2 per cent in the contracts to create flexible workspaces, that opportunity—you could be making
see major corporates requiring LEED Gold
most major developers almost inevitably United States. either within individual buildings or across a 40 per cent to 50 per cent premium
certification as a condition of tenancy. “We
have to cater to the requirements of an entire portfolio of assets. Coworking on a traditional rent.” Although so far
have not seen that yet here, but I think that
institutional investors from Europe According to one Shanghai-based fund companies thereby gain access to a this model is relatively rare in the Asia
will eventually be the direction of travel.”
and North America, who by and large manager, “Lots of smaller coworking large client base of established corporate Pacific, landlord/operator partnerships
require entities in which they invest to companies in China are now having tenants while simultaneously slashing can be expected to evolve quickly over the
Meanwhile, more and more Asia Pacific
meet a minimum standard in terms of trouble servicing [debt]. There is definitely both rental overheads and the large capex medium term.
real estate players are signing up to
sustainability. Larger European pension demand, but the dilemma for investors is commitments needed to set up new
the Global Real Estate Sustainability
funds, for example, will not give capital the need to consider whether there will coworking centres. Landlords, meanwhile,
Benchmark (GRESB), which requires
to managers who cannot demonstrate be a negative impact on exit in terms of can upgrade amenities for existing tenants
managers of assets to report
environment credentials. pricing because the credit standing of the and are spared from having to compete
industry is deteriorating.” with the operators by creating standalone
platforms.
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