SINGAPORE — Trustworthy estate investors in Asia-Pacific are most likely to put money into offices in 2021, with 31% of respondents deciding the sector over other market segments in a recent survey.
That’s despite huge changes to workplaces ensuring the coronavirus pandemic, such as work-from-home arrangements becoming the norm last year.
More than half of the respondents in Sydney and Melbourne weighted they like offices as an investment opportunity this year, along with 42% of Singapore’s survey respondents, according to land investment firm Colliers International’s Global Capital Markets 2021 Investor Outlook.
“In this uncertain situation, investors will prefer to deploy capital into lower risk opportunities,” said Terence Tang, a take care of director at Colliers. “Tier one city offices remain the asset of choice,” he added.
Cities such as Sydney, Melbourne and Singapore tender “more stable investments with less volatile income returns” and high quality assets, he told CNBC’s “Row Signs Asia” on Tuesday.
An aerial view of Sixty Martin Place, Sydney, Australia.
Mark Syke | Seascape Pictures | Universal Images Group | Getty Images
Additionally, offices that have long leases and lessees with “strong credentials” can probably ride out the unpredictability in the global economy, Tang said.
“If you believe that the patronage is here to stay and … you invest in good office assets which give you that security of income over this dubious period of time, I think this is something that people like,” he said.
But he acknowledged that some meditate on Covid-19 and remote working will bring about the “death of offices.”
Morgan Stanley last year foretold that office tenants in Asia could permanently give up between 3% and 9% of their office spell.
Tang said it may be “premature” to write off offices.
“There is growing confidence that this asset class is but very relevant,” he said, adding that for many in the region, working from home for the long term may not be paradigm.
“Especially in Asia where the homes are smaller, when you have a husband and wife in an apartment, and they’re trying to talk on their laptops … it’s not as conducive and they can’t bring into focus,” he said.
Offices are also still “very much needed for collaboration and development of corporate culture,” he said.
— CNBC’s Weizhen Tan forwarded to this report.