News roundup: APAC property to rebound second half of 2024, and other headlines

For PropertyGuru’s real estate news roundup, APAC real estate is poised to rebound in the second half of 2024. In other headlines, Cambodia’s real estate tipped to be revitalized in 2024, while commercial bargains put real estate deals back on the agenda in Australia.

APAC real estate on the rebound: 2024 outlook looks bright in the second half amid strengthening leasing demand and investment sentiment

After enduring a challenging 2023 marked by high interest rates, a weaker-than-expected recovery in mainland China, and geopolitical tensions that weighed on leasing and investment activity, the Asia Pacific real estate market is poised for a brighter second half in 2024.

As reported in SCMP, CBRE’s 2024 Asia Pacific Real Estate Market Outlook encapsulates this brighter forecast in the theme “A Tale of Two Halves: Headwinds Followed by Recovery”, signalling a shift towards recovery as the year progresses.

In the office sector, leasing demand in Asia Pacific is expected to improve, although many companies are seeking to renew their leases or relocate on a similar budget. Expansionary demand is expected to be strongest in the tech sector – led by software and services – due to their strong revenue growth.

Most markets in the region will remain in favour of tenants as a glut of new office space is set to become available this year. This presents businesses with a prime opportunity to relocate to more desirable locations with enhanced amenities, potentially at reduced costs, while also securing favourable leasing terms.

Revitalised Cambodian real estate sector tipped in 2024

The possible lowering of interest rates by major US banks in 2024 spells a bright future for Cambodia’s real estate and construction sectors. The change promises to invigorate the market, boosting buying, selling, and renting activities, and energising the construction industry beyond 2023’s performance.

In mid-December, CNBC reported that the US Federal Reserve (Fed) announced its decision to leave interest rates unchanged, a move many believe will mark the end of the central bank’s rate hike cycle and pave the way for cuts in the coming year.

Tang Hour, vice-president of the Cambodian Valuers and Estate Agents Association (CVEA) and director-general of Amatak Property Service Co Ltd, told The Phnom Penh Post last 4th January that in late 2023, several major US banks had reportedly decided to lower interest rates on loans.

She said that rate cuts by US banks, commonly seen as the world’s largest source of finance, are certain to have a positive impact on economic growth and the real estate market worldwide, including in Cambodia.

Commercial bargains put real estate deals back on the agenda in Australia

Property fund managers are capitalising on the downtrodden commercial market, launching countercyclical funds, and taking over the management of unlisted trusts. With the Australian property cycle at a low point for traditional assets, more groups are looking to swoop on bargain properties and even whole trusts.

Big deals already in train include Quintessential Equity buying a tower in Brisbane for AUD257 million and, in Melbourne, Bayley Stuart going into due diligence to buy a Bourke St. building from Swiss institution AFIAA for more than AUD120 million.

Others, like property fund manager Castlerock, are looking to restock the balance sheets of their funds. It has just kicked off an AUD30 million-plus capital raising as it gears up for new acquisitions in its AUD526 million Castlerock Government Property Fund, according to realcommercial.com.au.

The Property Report editors wrote this article. For more information, email: [email protected].