APAC MARKET SNAPSHOT Q1

CAPITAL MARKE TS | ASIA PACIF IC 20

REGIONAL TRENDS
China commercial property shows resilience
Shanghai CBD office transactions rise 8% QoQ; Singapore’s GIC scoops up
LG Twin Towers in Beijing for USD1.1 billion
Residential outperforms in Singapore
USD433 million deal for Irwell Bank Road development site was the biggest
of the quarter
Strength seen in Korea office sector
Office transaction volumes reach USD1.7 billion in Q1 as multiple major deals
close, including private equity giant KKR’s fourth deal in the country
Australia faces slowdown after banner year
BlackRock takes 50% stake in Sydney office asset for AUD120 million in a
sluggish quarter
Hospitality hit by virus outbreak
Occupancy rates slide to 50%-65% in Japan amid high supply and tumble
to as low as 20% in the Indonesian resort island of Bali; Vietnam sees wave
of closures
The effects of the continuing COVID-19 pandemic were of course the main factor
impacting the Asia Pacific property market in the first quarter. Signs of the
outbreak weighing on sentiment were seen in markets across the region, however
robust government stimulus packages and policies are cushioning impacts, and
opportunities are emerging across many sectors in the region. In Hong Kong the
virus exerted further downward pressure after a prolonged period of political and
economic uncertainty, keeping major players on the sidelines. Similarly in Singapore
uncertainty has begun to limit activity in both the residential and commercial sectors.
Private equity inflows into India’s real estate market have slowed to a trickle and
investments in dynamic emerging markets like Myanmar have been put on hold.
While the extent of COVID-19’s effects on Asia Pacific property markets is still
unclear, there is already evidence of continued resilience supported by solid
economic fundamentals. In China, where business activity is gradually returning to
normal, policymakers have introduced a raft of support measures and development
plans that should provide a boost to key cities like Beijing, Shanghai and Shenzhen.
Vietnam should continue to benefit as manufacturers seek distributed alternatives
across South East Asia, and Australia from a concerted government measures to
aid the economy. Though near-term volatility is a given, the region’s overall growth
prospects remain positive, assuming the outbreak is contained in the first half of
2020, and the current downturn is likely to produce compelling opportunities for
discerning investors.
John Marasco Terence Tang
Managing Director Managing Director
Capital Markets | Australia and New Zealand Capital Markets | Asia
State Chief Executive | Victoria
China policymakers to the rescue commercial sector is also expected to see a slowdown despite limited short-term supply and
high occupancy rates as more companies move to alternative work arrangements. That said,
China’s property markets are set to benefit from a number of policies and initiatives introduced
investors should bear in mind the pattern of opportunities emerging rapidly from the aftermath
by national and local authorities in recent weeks to support recovery as the country begins to
of past crises and be buoyed by the government’s string support packages. Promising segments
emerge from COVID-19 crisis mode. These include plans by regulators and the city’s
where bargains are likely to emerge include logistics properties, quality office buildings, CBD
government on accelerating Shanghai’s development as an international financial centre;
residential and hotels.
coordinated development plans for Tongzhou district and three surrounding counties of Beijing;
and moves in Guangzhou and Shenzhen to facilitate property transactions and ease cashflow
pressures on developers. The sale of Chengdu’s Tianfu Software Park C2 during the quarter South Korea sees burst of office activity
was a positive sign of continued demand for such spaces. South Korea’s office sector proved a bright spot in the first quarter, holding steady with total
transactions worth close to USD2 billion. These included the purchase of Seoul’s Namsan
A mixed picture in Japan, robust offices and logistics Square by a consortium including US private equity firm KKR for KRW500 billion
(USD402 million), and LB Asset Management’s KRW550 billion (USD443 million) bid for the
As would be expected the COVID-19 outbreak has weighed more on tourism and consumer-
mixed-use Acro Seoul Forest complex, backed by Singapore’s GIC. The sector should remain
dependent segments of the Japanese property market such as hospitality and retail, where
vibrant given the high number of sales expected this year though a prolonging of the virus
businesses are contending with monthly sales declines of up to 90%. Reduced demand for
outbreak could dent sentiment.
space from smaller retailers is likely to prove a significant drag on the market. On the other
hand, the office and logistics sectors remain relatively robust. In the Tokyo office sector pre-
commitments for 2020 account for 85% of supply, and rents in logistics facilities in major cities Australia, New Zealand set to see softer conditions
are expected to hold firm as efforts to contain the virus contribute to e-commerce demand. Generally resilient property markets in Australia and New Zealand are facing a temporary
slowdown as the coronavirus outbreak slows decision-making. In Sydney the uncertainty put
Watch for long-term opportunities in Hong Kong additional pressure on traditionally low Q1 volumes, while Melbourne and Brisbane are expected
to see a quiet Q2 after a record year for commercial transactions. Market activity has also been
The near-term outlook for Hong Kong real estate has dimmed, with the SAR already reeling
disrupted in Auckland though multiple transactions and contracts are still being negotiated.
from months of political instability and an economic slowdown. With investors reluctant to take
Overall, strong government policy measures and planned infrastructure investments are
on risk and sellers showing little inclination to lower prices, activity has slowed significantly.
expected to help cushion the impact of the virus on these markets, which remain among the
While capital values are expected to decline over the next quarter across all sectors, the
region’s most desirable and cost-competitive.
downturn is likely to result in discounts and distressed assets that will prove attractive long-
term prospects for the many investors still interested in the market, with offices and industrial
conversion opportunities showing appeal and hotels for rebound uplift. Please feel free to contact our relevant capital market experts for further
insights and in-depth discussions on key trends and opportunities across this
Support measures lighten uncertainty in Singapore fast-changing region.
Singapore’s residential sector performed relatively well in the first quarter of 2020 but further
restraint is expected from developers going forward and home sales remain sluggish. The
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 4

AUCKLAND
BIGGEST DEAL
» 136 Fanshawe Street
The first quarter of 2020 saw a lot of changes due to the COVID-19 outbreak. New USD180M | Office
Zealand was put into lockdown for at least four weeks beginning March 25 to
eliminate the spread of the coronavirus. Importantly for New Zealand, the government MAJOR MOVERS Q1 2020
and the central bank have adopted a positive and supportive mindset. There has been
some disruption to market activity such as due diligence and settlement procedures, » Core Industrial
however, there are some transactions and conditional contracts being negotiated. » Core Office

SECTORS TO WATCH Q2 2020

The official cash rate is now at a record-low 25 basis points
and will remain at this level for at least a year. The government
announced phase one of its COVID-19 Economic Response package
worth NZD 12.1 billion (approx. 4% of GDP) on March 17. Additional
spending has been announced, now reaching NZD 20 billion. There
is likely to be more government spending announced. There has also
been a focus on infrastructure and construction with ‘shovel ready’
projects to kick-start economic growth. The Reserve Bank has also
commenced a significant quantitative easing programme.
Major banks are also in discussions with businesses and property
owners to assist with deferred mortgage payments and other
measures. Collectively, these initiatives are likely to help reduce
the economic and financial impacts of COVID-19 occurring over the
short term.
Leading up to the first two months of 2020, strong occupier demand
for office and industrial space combined with supply constraints
resulted in record-low vacancy rates. There are a number of new
premier office developments expected to be completed over the
next five years – that are expected to resume construction and
planning after the lockdown ends. Some new leasing opportunities
may become available due to the current changes in the economy
and financial markets. We expect core office and industrial assets
will continue to be a highly attractive asset class to a wide range » Industrial
of prospective buyers. A greater focus on tenant covenants will be
a key feature of the market, with investors assessing the resilience » Office
of tenants based on metrics such as strong cash flows, manageable
debt and a reliable revenue outlook.
HIGHLIGHTED OFFICE DEALS
» PAG Asia acquired 136 Fanshawe Street for NZD310 million
(USD180 million) from Mansons TCLM. The office building is
currently under construction and is expected to be completed
CHRIS DIBBLE
by 2021.
Director | Research and Communications
» Invesco Funds acquired office building Chorus House for chris.dibble@colliers.com
NZD144.5 million (USD91.0 million) from local onshore investors,
reflecting an approximate yield in the low 5% range.
PETER HERDSON
» PAG Asia acquired office asset 2-14 Wakefield Street (AUT National Director | Capital Markets
Building) for NZD62.5 million (USD40.6 million) from a local peter.herdson@colliers.com
private developer.
RICHARD KIRKE
International Sales Director | Capital Markets
richard.kirke@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 5

BEIJING
3
EN-BLOC TRANSACTIONS
In Q1 2020, the Beijing government introduced three policy directives aimed at

1.2B
ensuring the supply of land and promoting the real estate sector’s development
through the rest of the year in the city’s Tongzhou District and Sanhe, Dachang USD
and Xianghe Counties in Hebei province. The quarter also witnessed three COMBINED VALUE
transactions, totaling approximately RMB8.8 billion (USD1.2 billion).
BIGGEST DEAL
The three transactions in Q1 2020 were diverse in property type, Adhering to the cap bottom line of the scale of construction » LG Twin Towers
involving one for each of these sectors: mixed-use, office and hotel. land, the city’s available land for urban and rural construction USD1.1B | Mixed-use
is reduced to 2,860 square kilometers, which should encourage
LG Twin Towers located in Chaoyang District, a mixed-use property, and guide the use of the existing land for construction, the scale
was acquired by GIC for RMB8.0 billion (USD1.1 billion), making up ratio of which shall not be less than 55%.
92% of the total transaction volume for the quarter. GIC represented MAJOR MOVERS Q1 2020
» The coordinated development plan of Tongzhou District, Beijing,
the lone foreign buyer in the quarter.
and Sanhe, Dachang and Xianghe counties of Hebei Province » Mixed-use
Looking ahead into Q2 2020, investors will continue to seek
opportunities in Beijing’s investment market because of the limited
offers a basic guide for the planning and construction of Tongzhou
District and the three northern counties.
» Hotel
investment stock available amid the restrictions put in place to
contain the COVID-19 pandemic. Meanwhile, investors will focus HIGHLIGHTED DEALS
on properties that generate stable incomes or offer large value-add SECTOR TO WATCH Q2 2020
» GIC purchased a mixed-use property - Beijing Twin Towers
potential, and the office sector will continue to be in the spotlight.
located in Chaoyang District from LG for RMB 8.0 billion » Office
Further, the new policy directives, while facilitating land supply, also (USD1.1 billion). The project has a total GFA of 150,281 sq m.
aim to advance plans for the Tongzhou and Beijing Economic and » Qian An Jiujiang Wire Co., Ltd purchased an office building in
Technological Development zone. Their aim is to essentially ensure: NAGA Shangyuan in Dongcheng District from Jingrui Holdings
» Better use of the supporting and leading role of the “three cities Limited for RMB 476 million (USD 67 million). The project has a
and one district” development platform total GFA of 5,768 sq m.
» The city’s total planned supply of construction land is 3,710 hectares » New Oriental Group acquired Shang Du Shou Fu Hotel in Yanqing
in 2020. Of this supply 1,650 hectares are earmarked for special District for RMB 250 million (USD 35 million). Total GFA of the CHARLES YAN
use, transportation use, and water construction use while property is 30,125 sq m. Managing Director | North China
charles.yan@colliers.com
2,060 hectares are meant for urban and rural construction use.
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 6

BRISBANE
MAJOR MOVER Q1 2020
» Office
During Q1 2020 the COVID-19 pandemic had a significant impact on equities, forcing
a 50-basis point drop in the official cash rate in March to a record-low 0.25%, the SECTORS TO WATCH Q2 2020
softening of the Australian dollar, and the introduction of quantitative easing measures.
In addition, both the federal and state governments instituted lockdowns to prevent the » Industrial
further spread of the disease. While all three levels of government (federal, state and » Office
local) and Australian financial institutions have put in place a number of measures to
support the economy during the COVID-19 pandemic, the full economic and financial
impacts of the virus outbreak remain unknown.

On the back of solid infrastructure investment, a recovering occupier
market and widening yield spread compared to the Sydney and
Melbourne markets, investment appetite for office buildings in
Brisbane helped push transaction activity to its highest level in
11 years. 2019 was the year for major transactions, witnessing six
deals in excess of AUD250 million and total sales volume surpassed
AUD3.75 billion. Further, a number of deals contracted in late 2019
were completed in Q1 2020.
Due to the economic and financial uncertainty caused by COVID-19,
we have seen significant disruptions to new acquisition decisions
and most institutions are undertaking a revaluation of their real
assets’ portfolios. Over-allocations to real assets, redemptions
and the denominator effect will be of interest to watch during the
remainder of 2020.
We anticipate accelerated transactional activity in H2 2020, and core
investments with defensive tenancy and cashflow profiles will be the
most sought after. Secondary assets representing good value may
generate keen interest and be acquired by institutions and private
investors alike.
While the full impact of COVID-19 on the Australian economy is still
unquantifiable, the long-term fundamentals of the Brisbane office
market remain sound and supported by a well-diversified tenant pool,
affordable rents compared to the largest capital cities, and limited
new supply under construction. The weaker Australian dollar should
support stronger cross border investment flows into Brisbane once
markets reopen.
Note: Market data is reflective of Brisbane Office sector only
JASON LYNCH
National Director | Capital Markets
jason.lynch@colliers.com
DON MACKENZIE
National Director | Capital Markets
don.mackenzie@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 7

CHENGDU
1
In Q1 2020, the Chengdu municipal government issued several directives EN-BLOC TRANSACTION
introducing a range of measures to tackle the outbreak of the COVID-19
disease. The quarter also saw the completion of one transaction – Tianfu BIGGEST DEAL
Software Park C2 – which was acquired by an institutional investor.
» Tianfu Software Park C2
Business Park Office
Market developments in the quarter were influenced by the measures HIGHLIGHTED DEAL
put in place on Feb 6 to battle the spread of the coronavirus. The » Business Park office – Tianfu Software Park C2 was acquired by MAJOR MOVER Q1 2020
objectives of these measures can be summarised as follows: an institutional investor, GFA 18,296 sq m.
strengthening the processes to prevent and control the spread of » Business Park Office
the COVID-19 epidemic; ensuring the orderly resumption of business
operations; providing financial support to help local enterprises
stay in business and retain their workforce; create the favorable SECTOR TO WATCH Q2 2020
conditions needed to aid the recovery of domestic consumption; and,
enhance investment volumes. » Office
Further, the phased manner in which travel restrictions are being
raised has impacted the resumption of productivity as well as
Chengdu’s investment market. Investors are staying put for the long
term and the next quarter should see a continuation of interest in
income-producing Grade A office opportunities in prime locations.

The completion of Tianfu Software Park C2, a business park, in the

quarter is a positive sign, indicative of the resilience of the demand
for office space in such facilities and the tenants that occupy them in
the face of the ongoing pandemic. Aiding this trend are government
policies to support the industries that business park office tenants
are active in.

SEAN SUN
Managing Director | West China
sean.sun@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 8

HONG KONG
3
EN-BLOC TRANSACTIONS
The novel coronavirus outbreak, which began in December 2019 created further

143M
downside pressure in Q1 2020 on Hong Kong’s real estate market, which had
already experienced a tough year until then. Key players have been reluctant to USD
enter the market, fearing a market crisis like the one following the SARS outbreak COMBINED VALUE
in 2003, which triggered a fall in asset values. However, discounted assets could
also create favourable opportunities for investors to reenter the market. BIGGEST DEAL
» Tuen Mun Town Lot No. 518
The political and economic uncertainties that affected Hong Kong » Ownership interest of retail podium of Telford Plaza II in Kowloon USD451M |
in 2019 continued to linger on in Q1 2020, this time coupled with Bay and Popcorn 2 in Tseung Kwan O sold to MTR Corporation Commercial Site (Government Land Sale)
the effects of COVID-19. Investment momentum remains slow as for HKD3 billion (USD380 million).
investors, while generally staying positive, become more cautious
» Commercial site at No. 11-15 Chai Wan Kok Street acquired MAJOR MOVER Q1 2020
and reluctant to take on more risks.

The price expectation gap between buyers and sellers remains wide
by First Group Holdings at a premium of HKD980 million
(USD126 million) or HKD6,300 (USD812) per sq ft on land value. » Office and retail assets
with the latter unwilling to lower their asking prices. The next quarter
will continue to be a buyer’s market albeit with weaker investment SECTORS TO WATCH Q2 2020
sales. Capital values across all property sectors will likely fall and
gradually adjust according to market conditions. As investors » CBD strata-titled offices
continue to show a positive interest in the market, we expect them to
pay more attention to assets with discounted prices and distressed » Industrial properties
properties. This will better position them to benefit from longer-term
investments. But, given the current situation, investors’ cautious
» Hotels
approach will result in longer negotiation periods before deals come
to fruition.

HIGHLIGHTED DEALS
» Government land Tuen Mun Town Lot No. 518 awarded to
Kaisa Group Holdings Ltd. at a premium of HKD3.5 billion ANTONIO WU
Deputy Managing Director | Capital Markets Hong Kong
(USD451 million) or HKD6,500 (USD838) per sq ft on land value. antonio.wu@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 9

INDIA
2
EN-BLOC TRANSACTIONS
The current slowdown has reduced private equity inflows into the Indian real
estate market. During Q1 2020, the sector witnessed a meagre USD222 million
(INR16.4 billion) of investment inflows, recording a drop of 62% q-o-q and USD 222M
89% y-o-y. However, the longer-term picture remains positive given the COMBINED VALUE
country’s robust growth outlook.
BIGGEST DEAL
» Lodha Excellus
The rupee’s depreciation will impact certain sectors, while others like
IT and pharma could see some upside. Lower oil prices should come
more than USD30,000 is expected to double over the next decade,
keeping the long-term consumption story intact.
(New Cuffe Parade)
as a respite to India and lower its import bill. A continued pandemic USD149M | Office
and shutdown could lead to lower real estate valuations, providing HIGHLIGHTED DEALS
investors an opportune time to look for stressed assets. Cap rates » Acquisition of a ~650,000 sq ft office building in central Mumbai MAJOR MOVERS Q1 2020
of commercial assets are likely to decline in line with falling 10-year owned by Macrotech Developers (formerly Lodha Developers) by
government bond yields, placing these assets in a more lucrative Varde Partners for ~USD149 million. » Office
position. The office, warehousing/industrial and retail sectors, which
are annuity-based, have been preferred by investors and have seen a » Acquisition of Trident Hotel in Hyderabad, owned by Golden » Hospitality
Jubilee Hotels, by Blackstone Group for ~USD82 million.
several-fold increase in investment over the past five years.
» Industrials/Warehousing
Stressed opportunities are likely to increase in the residential,
hospitality, and retail sectors. The office space is likely to see delays SECTORS TO WATCH Q2 2020
in the completion of projects and take-up of space. REIT listings
may also be delayed, and renewals put at risk but there will be » Office
opportunities due to yield compression and continued adoption of
flex and core models. » Hospitality
Private equity investment in Indian real estate is expected to continue » Residential
to rise over the long term, with stronger growth expected compared
to other major economies despite the COVID-19 outbreak. While it
will remain weak in H1, consumer spending is set to grow 5.7% in
PIYUSH GUPTA
2020, similar to 2019. The number of households with an income of Managing Director | Capital Markets India
piyush.gupta@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 10

INDONESIA
MAJOR MOVERS Q1 2020
» Affordable landed housing
Like its counterparts around the world, the Indonesian government was trying to manage » Industrial land
the spread of the coronavirus in the first quarter of 2020. The outbreak is already having
a significant impact on the country, with year-to-date real GDP growth recorded at 1% » New townships, especially
versus a forecast of 5.1%. Stock prices have collapsed and, since late February, the rupiah around emerging industrial
has weakened from Rp13,939 to the USD to Rp16,100, a drop of 15.5%. areas

SECTORS TO WATCH Q2 2020

Of all the property sectors impacted by the coronavirus pandemic, sentiment pervades the market, property developers will also mostly
the hospitality sector seems to be the hardest hit. According to the likely delay new investments. » Bank owned real estate
Indonesia Hotel and Restaurant Association (PHRI), occupancy rates
dropped to as low as 20% for many of Bali’s hotels and resorts while divestment
the country’s overall occupancy rate fell to between 30% and 40%,
which is below the low-season average of 50%- 60%, since the
» Bank loan portfolio divestment
virus outbreak in late December. » Power center retail concepts
On the other hand, a weakened currency represents a significant
discount-buying opportunity for new, foreign capital entering the
market. If local property sellers haven’t adjusted their asking price in
rupiah, new investors could avail of significantly discounted prices
based on the currency’s depreciation alone.

Demand for office and retail space is also dropping with Jakarta
declaring a state of emergency in the capital and ordering offices
to close and employees to work from home. Many firms may also
find it difficult to pay rent as businesses suffer a dramatic decline in
turnover, and due to physical distancing rules and travel restrictions.

The residential property market will also be heavily impacted as

workers face layoffs, which may force many property owners (and
tenants) to default on their mortgage or rental payments. As negative STEVE ATHERTON
Director | Capital Markets Indonesia
steve.atherton@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 11

JAPAN
26
EN-BLOC TRANSACTIONS
Despite global uncertainty surrounding COVID-19, Japan’s real estate markets

8.07B
performed well over Q1 2020, although there is likely to be deflationary
pressures over the course of the year. The hotel sector will likely be the hardest USD
hit as owners struggle with oversupply in some markets, falling tourist numbers COMBINED VALUE
and the postponement of the 2020 Summer Olympics.
BIGGEST DEAL

The high supply of hotels in the run-up to the now postponed
Olympics equated to 30% and 65% of stock in Osaka and Kyoto,
respectively, posing a risk even before the virus outbreak reached
pandemic status. Now, oversupply issues coupled with declining
visitor numbers – monthly headline indicators suggest inbound
tourism will be down by 60–80% – have pushed total occupancy
rates down to around 50% to 65%. We expect this to strain operators
and investors, as more than half are tied to fixed rents.
trends should accelerate Japan’s low e-commerce penetration rates, » Anbang Insurance Group
a positive development for occupier activity and footprint. Residential Portfolio
Japan’s retail market is feeling the pressure too, with some retailers USD2.7B |
reporting a decrease in headline monthly sales of 30–90%. We Residential (11,368 units) – Buyer: Blackstone
expect the gap between small and large operators to grow, with a
reduction in space requirements from small operators likely to be
major pressure points. MAJOR MOVER Q1 2020

Tokyo offices continue to favour landlords with pre-commitments HIGHLIGHTED DEALS » Hotel
reaching 85% of supply for 2020, and yields remain tight averaging » Tokyo Tatemono Investment Advisors sponsored by a HNW
3.40%. The large rental gap between Grade A and Grade B offices investor purchased the 180-room Four Seasons Hotel in
offers attractive opportunities for investors to enhance rents through Kyoto from Berjaya Corporation for a total consideration of SECTORS TO WATCH Q2 2020
asset management. Osaka, with an almost non-existent supply, is
likely to see a fall in short-term leasing. However, the shrinking gap
USD453.3 million. » Central Tokyo Offices
between global benchmark interest rates, coupled with the dollar’s » An SPC of Goldman Sachs acquired the 95,220 sq m (GFA)
Minatomirai Center Building in Yokohama City for USD885.1 million
» Logistics in Tokyo and Osaka
continued strength, will likely concern future inbound investors.
at an undisclosed cap rate.
The logistics market remains an attractive longer-term prospect,
» A consortium led by an SPC of Norges Bank acquired a 49.9%
with a distinct lack of modern stock, especially within Greater Tokyo
co-ownership interest in the 146,611 sq m (GFA) Otemachi Park
(5% of stock). Rents across major regional hubs in Tokyo and Osaka
Building in Chiyoda-ku, Tokyo, for USD900 million, reflecting a
should hold firm despite record annual supply in recent years. In
cap rate of 2.70%. HIDEKI OTA
the event of a city-wide lockdown, the resultant impact to consumer Head of Capital Markets | Japan
hideki.ota@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 12

KOREA
10
EN-BLOC TRANSACTIONS
Despite the COVID-19 outbreak, the office investment market in Q1 2020

1.7B
was stable due to abundant liquidity and low interest rates. Investor interest
continued in properties with the ability to generate a stable income through USD
master lease contracts and long-term leases with blue-chip tenants. COMBINED VALUE

Office transaction volumes for Q1 2020 stood at KRW2.1trillion BIGGEST DEAL

(USD1.7 billion) as deals involving Samsung Life Building Yeouido,
Orange Center, Alpha Building, Namsan Square and Acro Seoul
» Namsan Square
Forest (D Tower) closed. In the short term, the number of office USD402M | Office
transactions may be reviewed due to the constraints of the current
work environment in the backdrop of the virus outbreak. But, given
the large number of office sales on the market in 2020, we see little MAJOR MOVER Q1 2020
risk of a sharp drop in office investment. There may be a decline in
investor sentiment if the COVID-19 crisis is prolonged.
» Office
HIGHLIGHTED DEALS
SECTORS TO WATCH Q2 2020
» A consortium made up of IGIS and KKR acquired Namsan Square
(formerly Kukdong Building) from Korea Real Estate investment » Office
& Trust (KOREIT)’s subsidiary KOREIT Asset Management for
KRW500 billion (USD402 million). The consortium plans to use » Industrial
value-added strategies to boost the value of the building, which
is KKR’s fourth real estate investment in Korea.
» NH-Amundi Asset Management purchased Orange Center,
formerly ING Center, from ARA-NPS Real Estate Investment
Trust (REIT) for KRW252 billion (USD203 million).
» LB Asset Management purchased Acro Seoul Forest, comprising
office, commercial and cultural facilities in Seongsu-dong, for JOON LEE
KRW550 billion (USD443 million), in a transaction backed by Senior Director | Capital Markets Korea
joon.lee@colliers.com
investment from GIC.
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 13

MELBOURNE
MAJOR MOVER Q1 2020
» Health & Aged Care
Melbourne started out the year as the strongest office market in the country,
with an average vacancy rate of 3.2% (2% in the Prime category) following years
SECTORS TO WATCH Q2 2020
of above-average absorption, near total pre-commitment levels for office assets
under construction, and a continued strong forecast for rental growth. » Office
» Education
A softening in pricing is expected for opportunities that arise in the As pricing softens, it will likely fuel interest from locals, especially
» CBD Retail
following quarter as a result of the significant market disruption in the private investor market, who will see the long-term value and
caused by the COVID-19 pandemic. take an opportunistic view to buy prior to any market rebound. We
anticipate investors will look most favourably on core assets with
But, coupled with the associated decrease in the official cash rate defensive tenancy profiles, rather than seeking secondary assets
and the Australian dollar’s depreciation, Melbourne is positioned as in distress. Securing income and cash flow will be critical during
one of the most affordable and defensive Tier 1 cities within the Asia this period.
Pacific region. Melbourne is also Australia’s most resilient market,
Note: Market data is reflective of Melbourne Office sector only
boasting the strongest population growth of all cities, a diverse office
tenant base and a commitment to infrastructure spending by the
state government.

2019 was a record year for commercial transactions nationally,

although there was a distinct lack of opportunities in Melbourne
within the most accessible and competitive AUD$100–300M range. JOHN MARASCO
However, inquiries from vendors at the beginning of 2020 was Managing Director | Capital Markets & Investment Services
State Chief Executive | Victoria
strong, with a higher turnover of mid-range office assets in the john.marasco@colliers.com
year’s forecast.

Since the onset of COVID-19, major decisions have generally been TRENT PREECE
put on hold and we expect this to remain the norm for Q2 2020. Director | Capital Markets
trent.preece@colliers.com
However, we forecast an acceleration in transactional activity in the
second half of the year, particularly in the markets of Melbourne and
Sydney, which are highly liquid, assuming the virus outbreak peaks ANNA CAVAR
in H1 2020. Associate Director | Capital Markets
anna.cavar@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 14

MYANMAR
MAJOR MOVERS Q1 2020
» Office
Investment pursuits in Myanmar have taken a back seat somewhat following the » Retail
growing economic concerns around the global coronavirus pandemic. However,
the domestic impact of the outbreak remains nascent and limited in scale, with the
property market expected to be resilient. In fact, interest in the commercial sector SECTOR TO WATCH Q2 2020
continues to surface with some noticeable shifts towards the industrial segment.
» Industrial
Foreign investors appeared bullish at the start of FY 2019–20. in real estate and property investment, especially in the industrial
Myanmar has adopted a new fiscal year with effect from sector, remain present and lucrative.
October 1 2019, which runs from October 1 to September 30. In
January, the Directorate of Investments and Company Administration
(DICA) stated that approved FDI had reached over USD1.5 billion
since the start of the fiscal year, up 88% y-o-y. The real estate
sector contributed USD440 million, making up about 38% of total
FDI in the first three months of the fiscal year.

However, given the recent global situation, a temporary slowdown

in activity is likely in the near term. In the meantime, measures have
been adopted by businesses to continually buoy growth and minimise
economic impact. Occupiers continue to conduct due diligence
despite delaying timelines for market entry. Retail landlords are now
offering rental incentives for existing tenants. Serviced apartment
operators and hoteliers have become more flexible and willing to
reduce rates. A few investors have started looking at accelerating the
use of automation in logistics and operations, and building industrial
parks, as well as reviewing commercial land acquisitions.

Overall, the magnitude of the impact will depend on the duration of

the outbreak and counteracting measures, and the effects on full-
KARLO POBRE
year economic growth are yet to be seen. Nonetheless, opportunities Managing Director | Myanmar
karlo.pobre@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 15

PHILIPPINES
BIGGEST DEAL
» Pandacan, Manila lot
The Philippine economy expanded by 5.9% in 2019, the slowest in eight years. 954,000 sq ft | Mixed-use development site
The pace of economic expansion we initially projected in 2020 is now threatened
by the COVID-19 pandemic, with some growth estimates for Q1 2020 now
MAJOR MOVER Q1 2020
coming in as low as 3%, as referenced from Bloomberg article released on April
2. In our opinion, a coordinated policy response from the Philippine government » Office
and central bank is likely to instill confidence in the property market before end-
2020, assuming the outbreak peaks in H1 2020. SECTOR TO WATCH Q2 2020
» Residential
The pandemic will likely hurt office space inspection activity, resulting gaming companies from China are mainly based – declining
in lower office take-up in Metro Manila in Q1 2020. However, we particularly if the China travel ban and the COVID-19 pandemic
expect an upside thanks to demand from outsourcing and traditional extend beyond H1 2020. Depending on the duration of the Luzon
firms, especially if the virus is contained by the first half of 2020. quarantine, prices in the secondary residential market, which covers
Depending on the duration of the community quarantine in the Luzon completed condominium units, will likely soften to their pre-selling
region, traditional and outsourcing tenants could bridge the demand levels by end-2020. Condo developers should offer more flexible
gap left behind by offshore gaming firms from China. The office terms to attract customers once the situation stabilizes, and buyers
vacancy rate in Metro Manila should hover between 5% and 8% in should take advantage of the opportunity presented by better pricing
2020, up from 4.3% in 2019. in selected business districts.

For office space tenants, there is an opportunity now to consider HIGHLIGHTED DEAL
new buildings in fringe locations where rents are cheaper compared
» Pandacan, Manila lot
to major business districts. It is also the right time for occupants
954,000 sq ft
to negotiate long-term leasing deals. Landlords, meanwhile, should
Mixed-use development site
work with existing tenants to provide flexible lease terms while
maximising the wellness features of their buildings.

In the residential segment, we project softer demand due to a

potential increase in unemployment and drop in remittances from
Filipinos working abroad. Colliers sees demand for housing in IEYO DE GUZMAN
Deputy Managing Director | Philippines
business districts - such as Manila’s Bay Area where offshore Ieyo.deGuzman@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 16

SHANGHAI
6
EN-BLOC TRANSACTIONS
China’s outlook has been clouded over by the COVID-19 pandemic. Policies have

1.1B
been rolled out in Shanghai to push the resumption of work and production,
and to maintain liquidity. Six transactions occurred in the quarter, down from USD
14 in Q1 2019. Total transaction volume stood at USD1.1 billion, with resilience COMBINED VALUE
evident in the CBD office, DBD retail and hotel sectors.
BIGGEST DEAL
CBD office transaction volumes increased 8% q-o-q, to help stabilise cashflows. » Shanghai HNA Tower
RMB3.6 billion (USD508 million), due to a single deal for Shanghai USD508M | Office
HNA Tower. Five out of the six transactions in the quarter were In addition, during the quarter the central bank, regulators and the
in the DBD, taking up more than 50% of total transaction volume. Shanghai municipal government issued joint opinions on accelerating
Transaction volumes in the DBD retail and hotel sectors were the development of the city as an international financial centre and
supporting the development of the surrounding Yangtze River Delta. MAJOR MOVERS Q1 2020
RMB2.6 billion (USD367 million) with GFA 83,074 sq m transacted,
and RMB880 million (USD124 million) with GFA 35,252 sq m Plans were published for Hongqiao, the North Bund in Hongkou
District and Pudong New Area.
» CBD Office
transacted respectively.
In Q2 2020, Shanghai will remain a favourable market for both
» DBD Retail
The acquisition of the Sanlin Incity retail property in the DBD by an
ARA-led consortium for RMB2.6 billion (USD367 million) accounted domestic and foreign investors in the office, retail and mixed-use
for 64% of DBD transaction volume. The deal is a positive signal for sectors. Investors are risk-averse and will continue to focus on
income-producing and value-add properties. SECTORS TO WATCH Q2 2020
the current quarter.

Domestic buyers were more active q-o-q, accounting for five out of
six transactions.
On the policy front, Shanghai authorities announced financial
measures to support small, medium and micro-sized enterprises
in resuming work and production. To ensure the progress and
stability of the land market, land use policies aimed at supporting the
development of service enterprises in response to the epidemic were
issued. The Shanghai local government also issued rules reducing or
exempting rents for some small and medium-sized enterprises to
HIGHLIGHTED DEALS
» Office
» China CINDA Asset Management Co., Ltd. acquired Shanghai » Mixed-use
HNA Tower for RMB3.6 billion (USD508 million), with total GFA
of 81,700 sq m and total aboveground GFA of 47,776 sq m.
» Retail
» Sanlin InCity was acquired from Cinve Real Estate by ARA
Asset Management, ICBC International and Straits Real Estate
Pte. Ltd. for RMB2.6 billion (USD367 million), with total GFA of
105,178 sq m, and total aboveground GFA of 83,074 sq m. BETTY WONG
Managing Director | China
betty.wong@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 17

SINGAPORE
BIGGEST DEAL
» Development site at
The residential sector took the lead in Q1 2020 with the tender awards of Irwell Bank Road
five government land sale sites. The tenders drew varying response from USD433.489M | Residential
the developers reflecting the discretion and prudence exercised by them
against the backdrop of uncertainty.
MAJOR MOVER Q1 2020
» Residential
Residential sector outperformed the rest of the sectors in Q1 2020 HIGHLIGHTED DEALS
after taking the back seat since the introduction of fresh cooling » City Developments Limited (CDL) emerged as the top bidder for
measures in July 2018. While developers already adopted a cautious a residential government land sale site at Irwell Bank Road for SECTORS TO WATCH Q2 2020
stance in pricing land acquisitions, we expect greater restrain as
Covid-19 escalates to a pandemic. Home sales had tracked well
SGD583.89 million (USD433.49 million) or SGD1,515 (USD1,125)
per square foot per plot ratio (psf ppr), only 2.5% above the
» Commercial
initially boosting developers’ confidence, but we anticipate buying
interest to moderate as the economic outlook becomes more
second highest bid. The site attracted 7 bidders. » Industrial
uncertain. While mortgage rates have adjusted lower, the general » Frasers Property Singapore clinched an Executive Condominium
market appetite remains weak. site at Fernvale Lane with a tender price of SGD286.54 million
(USD206.27 million) or SGD555 (USD400) psf ppr, just 0.5%
The strong volatility in stock markets has dampened market above the second highest bid. The tender drew 7 bids with
sentiments, despite the initial strong outlook for the commercial tight spreads.
sector with its limited short-term supply and high occupancy rates.
With disruptions to operations and emptying out of offices as safe
distancing necessitates alternative work arrangements including
split teams, staggered hours and work from home (WFH), many
decisions are left hanging. While priorities are different for now,
the COVID-19 crisis will come to a pass with time. We observed
from past events such as SARS and Global Financial Crisis (GFC)
that the best opportunities emerge immediately on the first signs of
recovery. Investors should focus on long term key drivers and look
out for opportunities that may emerge from the virus outbreak. We
recommend logistics properties, good quality office buildings, as well
TANG WEI LENG
as CBD residential as good opportunities in the COVID-19 aftermath. Managing Director | Singapore
weileng.tang@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 18

SOUTH CHINA
4
EN-BLOC TRANSACTIONS
Six major policies and plans were published in South China to support land supply

746M
and urban renewal, ease real estate red tapes, and alleviate cashflow pressures. Four
transactions occurred - two in Shenzhen, one in Guangzhou, one in Foshan, Guangdong USD
– totaling approximately RMB5.29 billion (USD746 million)1. All buyers were domestic. COMBINED VALUE

DBD transactions contributed 79% of total transaction volume, CBD » On January 21, administrative measures regulating the transfer BIGGEST DEAL
21%. The largest deal – China Merchants Central Plaza, acquired by
Rhino Capital for RMB2.5 billion (USD353 million) – accounted for 47%
of buildings, structures and attached parts constructed on
industrial use or mixed-use land for industrial production and
» China Merchants Central Plaza
of quarterly transaction volume. Foshan witnessed a landmark deal – R&D purposes; USD353M | Retail
China Overseas Properties’ acquisition of Vivocity from Mapletree.
» On February 19, the first batch of plans for the urban renewal of
In policy and plans, Guangzhou launched: Luohu District, Shenzhen; MAJOR MOVERS Q1 2020
» On February 18, Huangpu District’s first batch of urban renewal
plans for 2020, including four old villages, two old factories, and
» On March 11, measures to support real estate enterprises to
accelerate the resumption of work and production, aimed at
» Retail
three old towns; facilitating residential property sales and alleviating developers’
cashflow pressures.
» Development Project
» On March 4, a notice on measures to respond to the COVID-19
epidemic, to achieve economic and social development goals
for the year, including in financial support and loans to promote HIGHLIGHTED DEAL SECTORS TO WATCH Q2 2020
» DBD retail in Shenzhen: China Merchants Central Plaza was
healthy development and easing registrations of the real estate
market; acquired by Rhino Capital for RMB2.5 billion (USD353 million), » Office
» On March 11, the Guangzhou Construction Land Supply Plan
with total GFA of 50,000 sq m.
» Mixed-use
2020. The plan pledges total land supply to be 2,028 hectares, »
Office development project in Pazhou, Guangzhou: Kangmei
including 383 hectares of commercial land accounting for 19% of Pharmaceutical South China Headquarters was transferred to
the total; to stick to the outline of the construction of the Greater GF Funds for no more than RMB1.13 billion (USD159 million). Lot
Bay Area, actively promote the construction of key areas; to AH040248 has a site area of 4,836 sq m, and the site area for
increase urban land supply; to continuously maintain the supply Lot 10-2 is 317.7 sq m., based on a January 23 announcement by
of land for urban renewal and construction. Kangmei Pharmaceutical Co. Ltd. ALAN FUNG
Managing Director | South China
In Shenzhen, these policies and notices were published: 1
Subject to any public announcement mentioning the price of Vivocity, Foshan, Guangdong Province
alan.fung@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 19

SYDNEY
BIGGEST DEAL
» 59 Goulburn Street, Sydney
The first quarter of each year typically has the lowest volume of transactions with AUD270M | Office, (Colliers & JLL)
Q1 2020 being no different. In terms of transactions exchanged in the first quarter,
475 Victoria Ave, Chatswood, located in metropolitan Sydney, was a capital sell-
MAJOR MOVER Q1 2020
down from Cromwell to BlackRock from 100% to 50%. This is the only transaction
occurring in Q1 2020. The Sydney CBD and metropolitan markets saw a number of » Core Industrial
assets exchanged in Q4 2019 with the settlements occurring in Q1 2020.
SECTORS TO WATCH Q2 2020

The COVID-19 outbreak dictated the direction of the financial and as a buffer for the credit market to provide support to the property
» Office
property markets in the second half of Q1 2020. According to market over the short to medium term. » Industrial
Colliers International research, a significant proportion of investors
(40%) have highlighted cashflows and revaluation of assets as major HIGHLIGHTED DEALS
concerns within the office sector in the current climate. » An Asian syndicate acquired 191 Thomas Street, Haymarket, for
USD49.5 million on a yield of 3.6%. (Colliers)
Both the Australian and New South Wales governments have been
swift to respond to the financial volatility likely to be produced by the » Cromwell offloaded 50% of the 24,812 sqm office building
pandemic. The government’s actions have been viewed positively at 475 Victoria Avenue, Chatswood, to BlackRock for
by the global investor market, highlighting Australia’s intentions to USD80.34 million in February 2020. (Colliers)
continue as a vibrant investment market.
» Goodman Group divested offices at 1 Richardson Place, North
The listed REITS and Australian super funds with direct real Ryde, to JGS Property for USD29.95 million, reflecting a yield of ADAM WOODWARD
5.2%. (Colliers) Head of Office Capital Markets | Capital Markets Australia
estate investments have scaled down their projected growth in the adam.woodward@colliers.com
immediate term with write-downs of up to 15% depending on the Note: Market data is reflective of Sydney Office sector only
profiles of the office asset. Their acceptance of the financial impact
of the current health crisis has also been seen as a positive. JAMES BARBER
National Director | Capital Markets
The focus in the short term is on the occupier market and how the james.barber@colliers.com
Australian government’s stimulus package is received by the market.
The Australian cash rate saw two 25-basis point drops in quick JAMES MITCHELL
succession in Q1 to a record low 0.25%. These rate cuts are seen Director | International Capital | Capital Markets
james.mitchell@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 20

TAIWAN
1
EN-BLOC TRANSACTION
Hit by the COVID-19 outbreak, commercial property transactions slowed down

11M
significantly in Q1 2020 as investors became more cautious. Total transaction
volume stood at TWD12.9 billion (USD430 million), reflecting a 43% reduction USD
compared to Q4 2019. Nevertheless, land transactions remained very active. COMBINED VALUE

BIGGEST DEAL
With institutional investors’ decisions affected by the COVID-19 remain the most sought-after sectors because of solid demand. The
crisis, occupational buyers were the major contributors to retaining hospitality and retail sectors, which are experiencing increasing » The 70-year leasehold of
the market’s momentum, particularly in the industrial and office
sectors, which accounted for 54% and 31% of total transaction
operational pressures due to the ongoing virus outbreak and resultant
lockdowns, may offer buying opportunities at discounted prices.
a commercial plot in Xinyi
volumes, respectively. District, Taipei
HIGHLIGHTED DEALS USD1.04B | Development Site
Demand for development sites remained strong as developers
» Nanshan Life Insurance acquired the 70-year leasehold of a
remained keen to replenish their land banks. The transaction volume
commercial plot in Xinyi District, Taipei, through public tender
for development sites amounted to TWD84.2 billion (USD2.8billion) MAJOR MOVERS Q1 2020
for TWD31.2 billion (USD1.04 billion). The tender received four
in Q1, reflecting a 25% increase YoY and a record high. Nanshan
Life Insurance spent TWD31.2 billion (USD1.04 billion) on a 70-year
bids – all from the five largest insurance companies in Taiwan.
» Industrial
» Highwealth Construction acquired a commercial plot in Xitun
leasehold of a commercial plot next to Taipei 101, with plans to
develop an office tower at the location. District, Taichung, through public tender for TWD8.38 billion » Development Site
(USD279 million), with plans to develop a mixed-use commercial
Market activity was not limited to only Taipei but also extended to complex.
secondary cities such as Taichung, Taoyuan, Tainan and Kaohsiung. SECTORS TO WATCH Q2 2020
» Pegatron Corporation purchased a factory in Guishan District,
For instance, Highwealth Construction, a listed developer, purchased
two development sites in Taichung CBD for a combined value of Taoyuan, for TWD1.3 billion (USD43 million). » Industrial
TWD12.6 billion (USD420 million) in a single month. » Office
Commercial real estate continues to be an important investment » Development Site
vehicle and while the COVID-19 situation is delaying investing
decisions there’s still abundant capital in the market. And, with
interest rates at their lowest level since 2008, the upheaval caused
by COVID-19 could provide buyers greater room for negotiation and DEREK HUANG
Executive Director | Capital Markets Taiwan
opportunities for bottom-fishing. Office and industrial assets should derek.huang@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 21

THAILAND
BIGGEST DEAL
» Metropolis Office Building
Thailand was one of the first countries to record COVID-19 cases, but initially USD52.88M | Office
appeared to have mitigated its spread comparatively well. Nonetheless, the effects
of the epidemic have been keenly felt first and foremost in the hospitality, retail
MAJOR MOVERS Q1 2020
and leisure sectors, as visitor numbers sharply fell throughout the quarter, and by
the end of March there were very few flights operating to and from Thailand at all. » Residential
Business activity across all sectors has temporarily been significantly reduced. » Office
» Hotel
Visitor numbers to Thailand in 2020 were initially projected to reach HIGHLIGHTED DEALS
40 million. The actual number will be significantly lower, with many » Singha Estate purchased the Metropolis office building, located SECTORS TO WATCH Q2 2020
hotels now temporarily closing or operating significantly scaled-
back services. There has been some comfort regarding cash flow
at 725 Sukhumvit Road, Bangkok, from Fenix Power Company
Limited, at a price of THB1.725 billion (USD52.88 million). The » Residential
management, as the banks have so far responded proactively to the
unprecedented situation and supported business where necessary.
27,000 sq m building was held on a long leasehold interest, and
Singha are reportedly planning S Prime Growth Leasehold Real
» Office
The plan is that this will allow businesses to more effectively bounce Estate Investment Trust.
back when travel and the economy pick up. Therefore, rather than
prompting a ‘fire sale’ of assets, the COVID-19 situation has led to a » Carlton Hotel Bangkok Sukhumvit, situated on Sukhumvit Road
slowdown in market activity, with local support for Thai businesses between Asoke and Phrom Phong, opened on Feb 19, 2020. The
and savvy long-term investors looking to advance their initiatives in sale of the asset for THB2.5 billion (USD76.64 million) to The
Bangkok at a time when there are fewer buyers in the market. Carlton Hotel Group took place over two years prior.

We therefore predict deal flow activity will continue at a reasonable

but reduced level in the hospitality sector, as well as the office and
other commercial sectors during 2020, particularly in Bangkok.
The highest signs of stress are perhaps seen in the residential
development sector, as the slowdown in sales started back in
2019. In this sector, we see international investors being more
discerning in their choices to deploy capital, focusing on more robust
central Bangkok locations. BARNY SWAINSON
Senior Director | Capital Markets Thailand
barny.swainson@colliers.com
 Capital Mar kets | As ia Pac if ic Mar ket S naps hot Q 1 2020 | 22

VIETNAM
2
EN-BLOC TRANSACTIONS
While Vietnam finished 2019 on a strong note, the coronavirus pandemic
posed a major challenge for economic growth in the first quarter of 2020
and will continue to do so for the year ahead. The most affected industries BIGGEST DEAL
are F&B, tourism, hospitality, transport, agriculture and real estate. In order
to control the spread of the virus in the community, local governments have
» Grand Park Project (Phase 2)
Real Estate – Mixed-use Development
ordered a temporary suspension of business operations, notably restaurants,
entertainment services including, cinemas, bars and nightclubs, and gyms.
MAJOR MOVERS Q1 2020

The coronavirus outbreak is forecast to reduce Vietnam’s economic » Supply chain disruptions due to limited transport links with China
» Industrial Park
growth rate by around 1% to 1.25% from its 2020 target of 7%. have caused a 25% fall in manufacturing exports from Vietnam. » Logistics Developers
The overall disruption to Vietnam’s economy is difficult to forecast at Nonetheless, the outlook is positive with ongoing strong demand
this stage. However, the government has reacted quickly to control for leasing industrial land. It is widely viewed that Vietnam will
the outbreak. continue to be the main beneficiary of the shift in industry from
China, with industrial developers and landlords looking more
SECTORS TO WATCH Q2 2020
The most impacted sectors to date are tourism and hospitality
as well as retail, followed by offices, industrial spaces and the
favourably at Vietnam going forward. » Hypermarkets, supermarkets
residential market.
HIGHLIGHTED DEALS
and minimarkets
» Hotels and resorts along the coast and major cities like Ho Chi
Minh City (HCMC), Hanoi and Da Nang have temporarily shut
» February 2020: National Housing Organization JSC sold » Industrial parks
13,000 sq m of land at Binh Duong to Emerging Markets
down facilities to cut losses during the epidemic.
Affordable Housing Fund Pte Ltd to build a residential project. » E-commerce
» Retail landlords may have to consider rental discounts and rent- Transaction value confidential.
free periods to keep tenancies in place. Divestment of retail
» January 2020: Grand Park Project (Phase 2) in HCMC was sold to
space is reluctantly being discussed in the market.
Nomura RE Development and Mitsubishi by Vingroup JSC to build
» The residential development market has slowed only marginally a mixed-use residential project. Transaction terms confidential.
due to a more cautious approach by foreign developers coupled
with ongoing limited supply, ensuring demand and values haven’t TERENCE ALFORD
declined significantly. Director | Vietnam
terence.alford@colliers.com
ABOUT COLLIERS INTERNATIONAL
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our more than 15,000 enterprising professionals work collaboratively to provide
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CAPITAL MARKETS | ASIA PACIFIC
Terence Tang John Lin Joon Lee Barny Swainson
Asia China – South China Korea Thailand
terence.tang@colliers.com john.lin@colliers.com joon.lee@colliers.com barny.swainson@colliers.com

John Marasco Jeff Cui Karlo Pobre David Jackson

Australia and New Zealand China – West China Myanmar Vietnam
john.marasco@colliers.com jeff.cui@colliers.com karlo.pobre@colliers.com david.jackson@colliers.com

Adam Woodward Antonio Wu Richard Kirke

Australia – Sydney Hong Kong New Zealand – Auckland
adam.woodward@colliers.com antonio.wu@colliers.com richard.kirke@colliers.com

James Mitchell Piyush Gupta Imran Mohiuddin

Australia – Sydney India Pakistan
james.mitchell@colliers.com piyush.gupta@colliers.com imran.mohiuddin@colliers.com

Betty Wong Steve Atherton Ieyo De Guzman

China Indonesia Philippines
betty.wong@colliers.com steve.atherton@colliers.com ieyo.deguzman@colliers.com

Winter Yan Hideki Ota Tang Wei Leng

China – North China Japan Singapore
winter.yan@colliers.com hideki.ota@colliers.com weileng.tang@colliers.com

Jimmy Gu Bayan Kuatova Derek Huang

China – East China Kazakhstan Taiwan
jimmy.gu@colliers.com bayan.kuatova@colliers.com derek.huang@colliers.com

colliers.com/acmis
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