Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting to read:%0A%0A {0} %0A%0A {1}

Gordon Marsden: The future of office investment in Asia Pacific

Gordon Marsden • 06/12/2022

With the recent rise of alternative investments, office seems to be losing favor with investors. What do you think the future of office investment will look like?


Asia Pacific is home to 60% of the world’s population and is the only region that has recorded positive office net absorption every quarter over the past decade – even during the COVID-19 pandemic. Looking ahead, Moody’s Analytics forecasts that an average of 2.2 million new office jobs will be created in Asia Pacific each year, compared to only 0.3 million in Europe or the United States. With this strong office job growth, occupier demand in Asia Pacific will be substantial, and investors will follow where occupiers go.

Investment-wise, office is still the largest transacted asset class in Asia Pacific, accounting for roughly 45% of total income-producing property investments over the first nine months of 2022. Comparatively, office investments in the United States only accounted for 16%, according to MSCI. Many Asia Pacific countries are still creating new fit-for-purpose office stock, so access to office development returns is also an investment strategy that continues to have support.  

Part of the office sector’s attraction is its diversity: its diversity of geography – within the city or into suburban areas – the roles it fulfills, and who occupies it. The most repeated comment today referencing the office sector and its position in building “the portfolio of the future” is that you can pick office buildings with “new economy” tenants. 

Among the 42 major office markets in Asia Pacific, we have seen diverse rental trends. Markets with the strongest rental growth within the past 12 months are Sydney, Melbourne, Singapore, Seoul, HCM city, Hanoi, and selected cities in India, which have all recorded a y-o-y rental growth of above 5% as of Q3 2022. While the upcoming economic headwinds could mean slower rental growth in the next 6 to 12 months, we think in the mid- to longer-term, the region’s robust infrastructure development and strong office job growth will continue to drive upward rental growth in many of the Asia Pacific office markets.    

When we further think about the drivers of growth in the cities we track, we must be mindful of the distinction between the basket of assets that meet the ESG and space upgrade requirements demanded by tenants where this rental growth is concentrated, and a deteriorating outlook (brown discount) for assets being “left behind”. In addition, while operations needed to manage an office building have been viewed favorably compared to other asset classes in the past, the operational intensity driven by the demands and expectations of tenants is going to increase substantially – notwithstanding improved “Prop Tech” and more sophisticated BIM systems (or similar). 

Last but not least, Asia Pacific currently remains fundamentally under-allocated in global capital markets. We believe that once there is more clarity on the macroeconomic front, investment will return, and allocation to office will remain as one of the most important sectors in the region, not least because of the ability it provides to deploy significant capital to a single asset. 

These opinions are the author’s own and do not necessarily reflect the views of Cushman & Wakefield. To find out more about how Gordon Marsden views opportunities in Greater China, click his profile and get in touch.

For more on investment opportunities across Asia Pacific, visit our Real Estate Investment Hub here.


Rethinking the office sector
Research • Workplace

Rethinking the office sector in Asia Pacific

Our report takes a deeper dive into the underlying dynamics and drivers across The APAC region’s major markets and provides a roadmap for asset optimisation.
Dominic Brown • 21/06/2023
2022 2023 Asia REIT Market Insight
Research • Investment / Capital Markets

2022-2023 Asia REIT Market Insight

The Asia REIT market has experienced declines in stock prices and overall market values over the last 12 to 18 months, predominantly due to the influence of the U.S. interest rate hikes. Despite this, the Asia REIT market has still performed better than its U.S. and European counterparts. The persistent effects of the COVID-19 pandemic continue to pose global challenges for cyclical commercial real estate asset sectors, although the impact of this is becoming increasingly counteracted by growing market attention to new economy sectors. 
Catherine Chen • 07/08/2023
2022-2023 Mainland China Investor Intentions and Cap Rate Survey Report
Research • Investment / Capital Markets

2022-2023 Mainland China Investor Intentions And Cap Rate Survey

As China continues to optimize its COVID-19 control policies in an effort to re-energize economic growth, commercial real estate (CRE) investors are reacting quickly to the changing environment. In response, as a joint undertaking of our Valuation & Advisory, Capital Markets, and Research teams, in late 2022 we conducted an investor intentions and cap rate expectations survey, collecting valuable responses from mainland China’s largest CRE investors, both domestic and international.
Catherine Chen • 22/12/2022
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All