Asia-Pacific Logistics: A Surge in Supply Forecasted for 2024
According to Knight Frank’s New Horizon Outlook 2024 report, the Asia-Pacific logistics supply is poised for a record increase of 43.7% in 2024. This substantial rise is anticipated to alleviate the current tight supply conditions in the region. Christine Li, Knight Frank’s head of research in Asia-Pacific, highlights the expected influx in institutional logistics development, especially in Beijing and Shanghai, as a key factor in easing these conditions. This development presents businesses with expansion prospects and investors with lucrative opportunities.
The Resilient Residential Sector
Despite economic challenges, the Asia-Pacific prime residential sector remains strong. Keith Ooi, Group Managing Director of Knight Frank Malaysia, emphasizes the significant impact of the anticipated logistics supply increase on the commercial real estate sector. Christine Li notes a slight correction of 0.5% year-on-year in prime housing prices in 2023, reflecting the market’s resilience and the potential for mid-single-digit growth in 2024.
Economic Growth and Real Estate Potential
Kevin Coppel, Knight Frank’s managing director for Asia-Pacific, points out the region’s favourable demographics and investments in technology as driving forces for its economic and real estate potential. Christine Li adds that investors are realigning strategies to focus on long-term income and property market fundamentals.
Megatrends Shaping the Future
The report also highlights several megatrends shaping the region’s real estate market:
- Continued urbanisation, despite demographic challenges.
- Asia-Pacific housing the majority of the world’s urban population.
- Over half of the region becoming middle-class by 2024.
- The largest working-age population supporting economic growth.
- Residential: The report forecasts mid-single-digit growth in 2024, with notable developments in various Asian cities.
- Capital Markets: Private capital continues to drive the commercial real estate, with living spaces, life sciences, and data centers emerging as promising sectors.
- Office: The focus is on ESG-certified buildings and the adoption of an ‘office-first hybrid’ strategy.
- Logistics: Despite economic uncertainties, prime logistics spaces remain in demand, driven by e-commerce and digitalisation.
For more detailed insights, readers are encouraged to download the full “Horizons: Asia-Pacific Tomorrow” report from Knight Frank.