Commercial real estate has undergone significant repricing across Asia Pacific and European markets, creating a compelling opportunity for private wealth investors. Quality buildings in core markets are now trading below replacement costs — a dynamic not seen since the financial crisis — while institutional capital largely remains on the sidelines, according to JLL.
In Asia Pacific, the replacement-cost argument follows different mechanics but reaches similar conclusions. Rising construction and labor costs have pushed delivery costs for new prime office towers well above current acquisition pricing for quality existing buildings in markets like Sydney, while Tokyo presents selective opportunities in older buildings requiring repositioning.
“Rising construction and labor costs are being closely monitored by investors, in addition to the rate environment,” noted Tim Graham, global lead, international and strategic capital, head of private wealth in Asia Pacific
