It’s unfair in many ways, but when crisis comes, investors abandon Southeast Asia. Emerging markets are seen as the riskiest portion of an investment portfolio, so when investors decide they need to reduce risk, they cut back in the region.
In this tumultuous time, governments around the world have taken all steps to contain (or not) the spread of COVID-19. The World Bank forecasts a decline in global GDP of 5.2 percent in 2020, twice as bad as the global financial crisis in 2009. We have not seen such a drastic global recession since World War II.
Core real estate has always been a fluid concept. In the not-so-distant past, a large office building in a prime central business district with a single tenant would have been most investors’ definition of a perfect core asset. Today, the ideal office property is a multitenanted one that can be quickly reconfigured to match tenant or mixed-use needs.
The coronavirus outbreak and consequent lockdown responses have led to a secular realisation that some asset classes are somewhat more resilient, and others less so. Although immediate losers, such as hotels and prime retail, are being flagged out rather directly, the permanence of the gainers has yet to be truly tested, as the crisis continues to unfold with no clear end in sight.
Between March and August, we’ve organised and facilitated 55 different virtual roundtable meetings for 414 different participants, including 181 investors and 132 representatives from the companies that sponsor our publications.
The pandemic did not appear to have any ill effects on the real estate fundraising total registered during the second quarter. Instead, 28 funds reported final closings during the quarter, raising US$40.2 billion, according to Institutional Real Estate, Inc’s FundTracker database.
JLL says economic uncertainty resulting from COVID-19 is creating challenges when deploying capital, prompting investors to reimagine Asia Pacific strategies to focus on core geographies and further accelerate pre-COVID trends.
In June 2020, the total supply of co-working space in the Seoul office market reached 578,700 square metres, a six-fold increase compared with 2016, according to Savills’ Korea Co-Working Market Post-COVID report.