Asia REIT Market Insight 2023

2022-2023 ASIA REIT MARKET INSIGHT

Table 1: Total Market Value of Active REITs on Major Asia Exchanges

Figure 2: Market Value Share of REITs Active on Asia Exchanges

Number of REITs by Property Type

Quantity Market Value （ USD billion ）

%

1.3%

At the end of 2022, 40% of the active REITS in the Asia market were invested in multiple property types, together with 15% in industrial and logistics properties, 13% in office assets, 12% in hospitality, and 10% in retail assets. Of the remaining 10%, REITs were invested in infrastructure assets, sustainability-focused assets, healthcare, and data centers. In this report, we have adjusted asset categories to integrate apartments and hotels into the hospitality category, which also includes the rental housing sector in mainland China. The infrastructure category has been added, predominantly represented by highway products in mainland China and airport products in Thailand. The new sustainability category includes clean energy products in mainland China and the photovoltaic product in the Philippines.

2.1% 1.6%

Japan Singapore Hong Kong, China Mainland China India

2.3%

Japan

61

120.89

45.8%

2.8% 2.6%

Singapore

40

73.13

27.7%

Hong Kong, China

11

24.17

9.2%

4.7%

Mainland China

23

12.37

4.7%

9.2%

45.8%

Thailand Malaysia South Korea Philippines Others

India

3

7.41

2.8%

Thailand

29

6.73

2.6%

27.7%

Malaysia

18

6.13

2.3%

South Korea

21

5.50

2.1%

Philippines

7

4.13

1.6%

Others

7

3.30

1.3%

Figure 1: Number of REITs by Property Type in Asia

Source: Bloomberg Database, compiled by Cushman & Wakefield Valuation & Advisory Services. Data as of December 31, 2022.

TOTAL

220

263.75

100.0%

20 30 40 50 60 70 80 90 100

Source: Bloomberg database, compiled by Cushman & Wakefield Valuation & Advisory Services *Data as of Dec. 31, 2022

89

The contraction seen in the Asia REIT market in 2022 was primarily influenced by global macro policies and events. The U.S. Federal Reserve’s seven rounds of interest rate hikes, totaling 450 bps, sparked a global trend of rate rises. Elevated geopolitical risk, combined with supply chain concerns, also led to global inflation tracking above 6%–8%. Finally, heightened financial market volatility, at similar levels to that seen around the peak during the Q4 2008 global financial crisis, has also meant higher financing costs in many capital markets. As a result of these and other factors, the total return index for the global REIT market in 2022 was at -24.4%, according to the Nat ional Association of Real Estate Investment Trus t s (NARE I T) . By reg i on , the European market recorded the worst performance, at -40.5%, followed by North America at -24.8% and Asia at -10.9% in 2022.

34

29

27

23

7

5

4

0 10

2

综合 工业 / 物流 办公 住宿 零售 基础设施 可持续 健康医疗 数据中心

Retail

Office

Industrial

Mixed Use

Hospitality

Healthcare

/Logistics

Data Center

Sustainability

Infrastructure

Source: Bloomberg Database, compiled by Cushman & Wakefield Valuation & Advisory Services.

2.2 Market Value

At the close of 2022 the combined value of the Asia REIT market was at US$263.8 billion, down 14.7% compared to the end of 2021. The mainland China REIT market value surged 80% on the back of new product offerings, but the remaining Asia markets all experienced declines in market value. The Malaysia market witnessed the most evident contraction in market value, enduring a 34% fall, despite a new product listing. At the other end of the table, the Thai market saw the smallest contraction, displaying

an overal l decl ine of approximately 4%. In between, the Hong Kong REIT market value dropped by 20%, Japan by 18%, and S i ngapo r e by 1 4% . The s e t h r e e major markets experienced a significant cumu l at i ve deva l uat ion amount i ng to US$45 billion. In Japan, a wider interest rate gap and weakened yen have led to the J-REIT underperformance, keeping some investors on the sidelines due to potential funding concerns amid elevated uncertainty surrounding the interest rate outlook.

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