Asia Pacific commercial real estate investment volume rose by 44% q-o-q to US$26 billion in Q3 2020, reflecting a broad-based improvement in market sentiment. Activity was led by Korea, which saw strong purchasing demand from local asset management firms.
Office leasing enquiries and site inspections improved over quarter but have not yet been converted into actual leasing deals. Asia Grade A quarterly net absorption registered just 7.2 million sq. ft. NFA, a level not far from 10-year lows. Activity was characterised by renewals, downsizing relocations and consolidation.
New retail store openings increased but most had been planned pre-pandemic. The wave of lease surrenders and permanent closures did not rise compared to the April-June quarter but many retailers remained under pressure amid the weak economy and phasing out of relief measures.
Overall logistics demand was stable on the back of solid growth by e-commerce platforms and related Third Party Logistics (3PL) firms. Weaker sectors included trade-related and physical-retail-focused occupiers.