Real estate sectors
Office and retail real estate amount to a third of the investor portfolio in the Asia-Pacific region. However, this is predicted to change drastically in the coming years. Service sectors, including hotels and retail, endured the worst effects of the pandemic. Meanwhile the industrial real estate such as logistics and distribution centers managed to see growth and are expected to expand. Reflecting on this change, real estate asset allocation is shifting from retail to industrial real estate in the future. Office real estate had higher vacancy rates in the past few years and some have been transitioning into residential real estate. However, office rentals in large cities are expected to see growth in 2024.Real estate investors are increasingly interested in niche real estate sectors. Data centers are a popular niche real estate sector among investors. Currently, Tokyo and Shanghai have the largest live data center capacities in the Asia-Pacific region. Life sciences real estate is a new sector of interest and includes a range of medical facilities and properties.
