This special report by CBRE Research Korea summarises the findings of our recent survey on flexible office space in Seoul, as of May 2018, primarily focusing on the co-working and serviced office sectors, and assesses its impact on landlords and occupiers.
CBRE’s 2018 CBRE Global Tenant Survey polled more than 1,300 users of commercial real estate worldwide to determine which aspects of property management tenants value most and the types of new services they desire.
Industry 4.0 is driving significant change within the industrial and logistics property sector. With new technologies being adopted across a range of industry sectors and geographies, both the demand and supply sides of the business are experiencing multiple inflection points.
Like retail, office, hotels and many other sectors, Australia’s healthcare industry is evolving to adapt to changing demographics, technology and consumer expectations.
15% of Australia’s population is aged over 65 and forecast to grow to 18% of the population by 2027 and 20% by 2037. This is significant as admissions to aged care centres and hospitals increases rapidly after 70, placing great pressure on healthcare services.
Consumers expectations are changing with the advent of technology. Newer operating models will emerge across the broad healthcare categorises over the next decades. The pressure on stakeholders to provide and fund healthcare and the impact on real estate is expected to be significant.
This latest report in the WORK_IT series – the third in a mini-series looking at PropTech – examines the adoption of tenant engagement platforms by commercial real estate developers and occupiers.
The journey of an omni-channel shopper is spread across bricks and mortar stores, social media, apps, desktops and mobile devices. Access to internet-connected mobile devices has transformed shopping into a 24/7 activity, consequently placing pressure on retailers to provide fast and efficient delivery and returns processes.
Asia Pacific hotel transaction volume increased by 8% y-o-y to US$2.8 billion in Q1 2018. Virtually all markets saw strong demand from a broad range of investors but activity was constrained by the lack of stock for sale. Upbeat markets were led by Vietnam, where surging visitor arrivals continued to support robust demand for hospitality properties. In Singapore, the price gap continued to deter transactions but sentiment improved on the back of stronger hotel performance and inbound visitors.
Asia Pacific commercial real estate investment turnover stood at US$25.4 billion in Q1 2018, an increase of 7.8% y-o-y. China recorded a steady flow of deals, mainly driven by domestic investors. Highlights included property companies acquiring development projects on the secondary market and insurance companies completing several deals. Japan saw strong activity from J-REITs supported by an increase in capital raising due to the recovery of stock prices.
As a densely populated international gateway city, Hong Kong is in short supply of land. Low vacancy means the city’s property prices and rents frequently top the global rankings, ensuring that cost-effective real estate is keenly sought after.
Despite the first quarter traditionally being a quiet period for leasing activity, retail leasing demand was solid amid the positive outlook for key Asian markets. F&B remained the major driver of retail leasing demand in Q1 2018. Luxury retailers returned to cautious expansion in Hong Kong, Singapore and Japan on the back of strong sales growth. However, weaker sales saw fast fashion retailers review their portfolios and consider closing stores in Singapore and Australia.
Asia Pacific saw resilient office leasing demand in Q1 2018, driven by the financial, TMT and co-working sectors. China recorded strong leasing activity for space in major cities. Leasing demand in Hong Kong also gained momentum, supported by strong net absorption in new primary stock.
The rapid pace of technological innovation is transforming the business landscape. Companies must respond quickly and be proactive in embracing new technology. Decision-making is becoming more complicated. Greater flexibility has to be factored into space planning and workplace design.
Since the development and widespread use of the internet, the development of information communication technology (ICT), encompassing all manners of computer and telecommunications technology including the internet, integrated circuits, broadband transmission, has severely disrupted many industries.
For most companies, business intelligence has traditionally involved allocating considerable time and resources to generating dreary statistical reports, which are then displayed in spreadsheets and pored over by teams of analysts.
CBRE Korea, a global commercial real estate service company, released its “2018 Seoul Tenant Profile” report which provides comprehensive research on the composition of office tenants in Seoul’s major business districts.
The fifth annual CBRE Investor Intentions Survey focuses on the forward looking views of real estate investors in Asia Pacific and provides an insight into their concerns, priorities and strategies for the coming year.
A great number of positive signals regarding economic development indicate a promising year ahead. While concerns remain over the stability of future credit growth, Vietnam is expected to further develop its economy in 2018 with strong inflow of foreign investment. Commercial leasing activities will continue to be active, with rental growth and occupancy levels expected to witness sustained improvements across all property types.
America’s Cup regattas have significant impacts on host city economies. The 2003 Auckland event generated a net expenditure of $523 million, and estimates range between $403 and $892 million for Cup related expenditure being generated by the 2021 event with an economic impact of up to $977 million possible.
With continued low growth anticipated, the better-than-expected domestic economic performance in 2017, combined with the gradual global economic recovery is expected to provide a solid base for steady economic growth in 2018.
The co-working sector saw rapid growth in Greater China in 2017, expanding its footprint by around 70-80% in Hong Kong anad other major cities, although Taiwan lagged behind. In addition to strong demand from start-ups, co-working centres' ability to offer higher flexibility and lower costs is attracting an increasing number of medium-to-large enterprises utilising co-working space as a new component of their corporate real estate strategy.
Supported by the strong rebound in the manufacturing sector and a synchronised recovery in global economies, Singapore’s annual GDP growth of 3.6% in 2017 surpassed initial estimates. While growth is expected to moderate in 2018, the continued focus on digitisation and transformation of Singapore’s key industries will help pave the way for more sustainable growth in the longer term.
The Australian economy is expected to remain in a low and steady growth phase, but with a different mix of drivers as the residential sector starts to detract from growth, whilst non-mining CAPEX plans look to have improved.
Despite slower macroeconomic growth and steady demand for real estate, the regional business landscape is set to undergo significant change in 2018. Technological innovation will challenge the status quo; new companies and industries will emerge; end-users will be more vocal and opinionated; and the era of yield compression will end.
The technological revolution that we see around us is reversing the order of corporate real estate. In knowledge-driven economies of the future, companies’ decisions would be driven by the need for connectivity and accessibility, as well as talent attraction and retention.
Private equity real estate fund raising activity in Asia Pacific has recovered in recent years as investors refocus on the region. US$42 billion of capital was raised by Asia Pacific focused closed-end real estate funds formed between 2014 and Q3 2017, which translates to around US$116 billion (post leverage) of purchasing power.