Asia REIT Market Insight 2023

2022-2023 ASIA REIT MARKET INSIGHT

CHAPTER 2 RECENT CHANGES IN THE ASIA REIT MARKET

2.1 Number of REIT Products As of Dec. 31, 2022, there were a total of 220 REIT products active in the Asia market, an increase of 18 REIT products from the previous year. New additions in the mainland China, Thailand, South Korea, Philippines and Malaysia markets totaled 21 products. There were three product losses, with the Singapore market del isting two REITs via mergers and a further delisting in Thailand. The new products mostly focus on warehouse and logistics assets, industrial facilities, and office buildings; as well as airport infrastructure and clean energy assets. As with the mainland China market, the Tha i l and RE I T ma r ket i nv i tes f ur ther exploration, with the benefit of offering both freehold REITs and leasehold REITs. In addition, the Philippines REIT market welcomed its first renewable energy REIT listing, primarily holding photovoltaic assets and land leased to photovoltaic operators. In the Singapore market, Mapletree North Asia Commercial Trust (MNACT) officially merged with Mapletree Commercial Trust (MCT) in August 2022 to form Mapletree Pan Asia Commercial Trust (MPACT). Following the merger, MPACT holds 18 commercial, retail, and vehicle parking assets, with a total managed portfolio of S$17.1 billion, making it the third-largest REIT in Singapore and one of the top ten REITs in Asia.

CHAPTER 1 OVERVIEW OF THE ASIA REIT MARKET

Cushman & Wakefield data shows that a total of 220 REIT products were active in the Asia market at the close of 2022, with a combined market valuation of US$263.8 billion, a drop of 14.7% on the prior year. Wi thin the region, Japan, South Korea and Singapore were the early pioneers in establishing REIT markets. But with strong support from regulatory authorities, nations including Thailand and the Philippines, as well as India, have successfully established their own REIT markets in recent years, encompassing diversified offerings in sectors such as commercial office, infrastructure, warehousing and logistics, industrial facilities, and renewable energy. The emergence of infrastructure REITs in mainland China has also brought new changes to the Asia REIT market landscape, and mainland China is now the fourth largest REIT market in Asia.

Overall, the Asia REIT market experienced declines in stock prices and overall market values through 2022, predominantly due to the influence of the U.S. interest rate hikes. Despite this, the Asia REIT market has still performed better than its U.S. and European counterparts. Nevertheless, a drop in REIT acquisition and merger activities around mainland China assets in the Singapore and Hong Kong markets has indicated a more cautious view by investors. We have also seen that the persistent effects of the COVID-19 pandemic continue to pose global challenges for cyclical commercial real estate asset sectors, such as hotel, office, and retail. However, the impact of this is becoming increasingly counteracted by growing market attention to new economy sectors, such as modern logistics facilities and data centers, as well as living sectors, extending from multifamily assets to healthcare facilities.

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