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Asia Pacific Commercial Real Estate Market Revives in the Fourth Quarter; South Korea, India, Taiwan Set Records in 2020 – RCA

Real Capital Analytics / February 11th, 2021

Singapore, February 9, 2021 – Sales of commercial property in the Asia Pacific region picked up in the fourth quarter of 2020, ending the pandemic-blighted year on a brighter note, the latest Asia Pacific Capital Trends report from Real Capital Analytics showed.

Sales across the major income-producing property types totaled US$141.2 billion in 2020, down 23% from 2019’s record level. Fourth quarter sales activity totaled US$44.7 billion, just 10% lower than the same period a year earlier, before the Covid-19 pandemic cast a shadow over the region.

Several sectors and geographies surpassed previous levels of dealmaking despite the challenges presented by lockdowns and travel bans and the dimmed economic outlook. South Korea, India and Taiwan all reached record acquisition levels. So did the industrial sector, bolstered by a surge in demand for logistics facilities and data centers.

Sales of development sites, which principally take place in China, fell 7% in 2020 but increased 9% in the fourth quarter from a year earlier. Annual development site deal volume totaled US$628.5 billion.

David Green-Morgan, MD for APAC, Real Capital Analytics (RCA), said: “After a truly bleak and uncertain start to 2020, the market has steadied and in the fourth quarter we saw a welcome rebound. This bodes very well for activity in early 2021 as we saw a number of deals across the region roll over into the new year.”

Industrial Sector Charges Ahead, Boosted by Logistics and Data Center Trades
The industrial sector forged ahead thanks in large part to record trading volumes of logistics assets and a surge in demand for data centers. In the logistics sector, transaction volume surpassed US$13 billion for the third year in a row, as demand for assets vastly outstrips the supply. Data center volumes more than tripled over 2019 levels to reach almost US$5 billion in investment.

The Year 2020 Is One to Forget for Singapore as Deal Activity Tanks

Singapore logged its second worst year for commercial property deal making in RCA records, albeit on the back of a record 2019. Transaction volume slumped 73% to US$3.3 billion, the sharpest decline among the leading markets in Asia Pacific. Both Taiwan and India overtook the nation-state in the ranking of the region’s largest markets.

Benjamin Chow, RCA’s Analytics Manager for Asia Pacific, said: “Across most of Asia Pacific, volumes have been boosted by the closure of multimillion-dollar deals, which obscured some of the weakness at the lower end of the market. For Singapore, it’s quite the reverse – while large deals have all but disappeared, smaller deals recorded a far more modest fall. Declines in office pricing stabilized towards the end of 2020, even as those in other gateway cities
were just beginning. With the virus very much under control, there are many reasons to be optimistic about 2021.”

Office Sector Investments Propel India to Become Sixth Largest APAC Market

Tech hub Bangalore pulled in US$4.1 billion in investment in 2020, the largest haul ever for a single Indian metro, pushing the total country level of deal activity to US$6.2 billion. Portfolio deals by cross-border giants Brookfield and Blackstone comprised more than half of the annual total.

Benjamin Chow, RCA’s Analytics Manager for Asia Pacific, said: “Bangalore vaulted into ninth place in the ranks of the region’s largest metros in 2020, and India ranked sixth in the list of the region’s biggest country markets. India’s office sector continues to provide compelling yield opportunities for regional investors, especially given Big Tech’s inexorable expansion over the past year. Whichever way you look at it, 2020 has been extraordinary for India.”

South Korea Bucks the Global Trend to Notch Record Deal Volume in Pandemic Year

South Korea was one of only a handful of leading global commercial real estate markets where investment grew year-on-year. Domestic institutions accounted for half of all investment, while the trend of investors venturing outside of Seoul in search of opportunities continued. Seoul itself was the largest market globally for retail sector sales transactions in 2020, and it was the second largest office market behind only Paris.

David Green-Morgan, RCA’s Managing Director for Asia Pacific, said: “South Korea is running counter to the global trend of declining commercial real estate activity. The market is forging ahead thanks in large part to domestic institutions, who switched their focus from overseas expansion to domestic consolidation in 2020. South Korea’s logistics sector is also one to watch, with demand far exceeding supply and yields falling sharply in 2020.”

Australia’s Miserable 2020 Sees Deal Volume Fall by Nearly a Half

Bright spots in Australia’s commercial real estate market were limited in 2020 but they did exist. Interest from European groups grew significantly, while the burgeoning apartment and logistics sectors saw a number of sizeable transactions. But the headlines are stark: annual deal volume dropped 45% year-over-year, capital flows from North America evaporated, and Sydney fell out of the ranks of the top five biggest commercial real estate markets in Asia Pacific.

Benjamin Chow, RCA’s Analytics Manager for Asia Pacific, said: “Australian investment was suffocated by the imposition of some of the region’s harshest lockdowns on its major cities, as well as the knock-on impact on investor sentiment. Once the yoke was lifted in November, the backlog of deals inundated the market once again, with a sizable pipeline built up by the end of the year. It’s still early days but the first quarter already looks on track to returning to, or even exceeding, pre-pandemic levels.”

Taiwan Notches Record Level of Investment in 2020; Eclipses Singapore

Almost US$5.5 billion of Taiwanese commercial properties changed hands in 2020, a 49% leap from 2019 levels and a record annual haul according to RCA data. A strong showing in the industrial sector and a hotel megadeal – the fifth largest single asset deal in the region in 2020 – helped propel transaction levels.

David Green-Morgan, RCA’s Managing Director for Asia Pacific, said: “Taiwan’s year is one for the record books – in a positive way. The benefits of coming down hard on the Covid-19 virus and closing the borders early in the year paid dividends for commercial property investors, with Taiwan passing Singapore for only the second time in the RCA records. Industrial investment in particular received a boost from the continuing realignment of manufacturing supply chains in the region.”

Domestic Investors Bolster China’s Deal Activity; Logistics and Data Centers in Demand

In China, Beijing, Shanghai, Shenzhen and Guangzhou all closed out 2020 with significant deals and for the fourth quarter investment levels dipped just 14% from the same period a year ago. Investment in 2020 overall was largely driven by domestic players. Cross-border investors from North America still made significant acquisitions in 2020 though European players retreated.

Benjamin Chow, RCA’s Analytics Manager for Asia Pacific, said: “China’s logistics and data center sectors are two of the hottest sectors globally at the moment. With increased institutionalization in both sectors, investor appetites have increasingly gravitated towards hyperscale facilities. Blackstone’s billion-dollar purchase of an industrial park in Guangzhou was the biggest logistics property ever traded globally in RCA’s database, while the biggest single asset data center deal of 2020 was in another tier 1 city, Beijing.”

Deal Activity in Japan Fares Better than APAC Average in 2020; Tokyo #1 Market

Investment sales in Japan fell back by less than the regional average in 2020 and the country retained its status as the largest market in APAC. Anbang’s multibillion-dollar apartment portfolio sale provided a boost, as did robust trading in the industrial sector. Indeed, the apartment and industrial sector both logged increases in investment volume and pricing in 2020. Spending by cross-border investors from Europe and North America was robust. Tokyo narrowly retained its status as the #1 APAC metro for commercial property sales in 2020.

David Green-Morgan, RCA’s Managing Director for Asia Pacific, said: “Japan regained its status as the region’s largest investment market in 2020, and the apartment and industrial sectors are likely to grow further in 2021 with many investors having them top of their pick lists. The work from home trend has yet to gain much traction in Tokyo which should also sustain office investment demand.”

Hong Kong Closes Out 2020 With a Jump in Transaction Activity

Hong Kong finished 2020 on a brighter note, with fourth quarter sales activity increasing 168% from a year earlier. Following Ping An’s billion-dollar office deal in the third quarter, Manulife Financial teamed up with Gaw Capital and other partners to close another sizable office deal in December. Still, for the year in total, transaction volume slumped 43%.

Benjamin Chow, RCA’s Analytics Manager for Asia Pacific, said: “Like 2019, Hong Kong’s journey can again be described as a tale of two halves. The first was largely a continuation of late 2019 – large deals disappeared, occupancies and rentals under pressure, no cross-border interest whatever. By midyear, pricing of commercial properties began to look more attractive, having fallen almost 20% from the peak a year before. Resultantly, deal activity began to creep back upwards, and overseas investors returned.”


Note to editors:

Real Capital Analytics (RCA) is the authority on the deals, players and the trends that drive the commercial real estate investment markets. Covering all markets globally, RCA delivers timely and reliable data with unique insight into market participants, pricing and capital flows. The most active investors, lenders and advisors depend on RCA’s market intelligence to formulate strategy and to source, underwrite and execute deals. An industry pioneer since 2000, RCA has offices in New York, San Jose, London and Singapore. For more information, visit


Ong Chor Hao
WATATAWA Consulting
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Lee Jing Hong
WATATAWA Consulting
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Siobhan Crise, Managing Editor, Real Capital Analytics