SINGAPORE – Asia-Pacific property investors are more likely to invest in offices in 2021, with 31% of respondents choosing the segment over other market segments in a recent survey.
That is despite major changes in workplaces following a pandemic coronavirus infection, such as work-from-home arrangements becoming the norm last year.
More than half of respondents in Sydney and Melbourne said they are enjoying offices as an investment opportunity this year, along with 42% of Singapore survey respondents, according to investment firm Colliers International’s Global Capital Markets 2021 Investor Outlook.
“In this uncertain environment, capital investors prefer to invest in lower-risk opportunities,” said Terence Tang, managing director at Colliers. “Tier one city headquarters is the preferred option,” he said.
Cities such as Sydney, Melbourne and Singapore will offer “more sustainable investments with less volatile revenue yields” and high-quality assets, he told CNBC’s “Street Signs Asia” on Tuesday.
Aerial view of Sixty Martin Place, Sydney, Australia.
Marc Syke | See pictures | Universal Image Group Getty Images
In addition, offices with long leases and tenants with “strong credentials” may be able to rip off such volatility in the global economy, Tang said.
“If you believe the office is here to stay and… you are investing in good office assets that will give you that income security over this uncertain period, I ‘This is something that people like, “he said.
But he acknowledged that some believe that Covid-19 and remote work will “kill offices. ”
Morgan Stanley last year estimated that office tenants in Asia could permanently waive between 3% and 9% of their office.
Tang said it may be “premature” to write offices.
“There is growing confidence that this asset class is still very relevant,” he said, adding that for many in the sector, it may not be good to work from home for the time being. long.
“Especially in Asia where the homes are smaller, when you have a husband and wife in a flat, and they try to talk on their laptops… it’s not so helpful and they can’t focus put it on, “he said.
Offices are still “desperately needed for collaboration and the development of a corporate culture,” he said.
– CNBC’s Weizhen Tan contributed to this report.