Offices are the number one choice for real estate investors in Asia-Pacific in 2021

SINGAPORE – Real estate investors in Asia-Pacific are the most likely to invest money in offices in 2021, with 31% of respondents choosing the sector over other market segments in a recent survey.

And this despite huge changes in workplaces in the wake of the coronavirus pandemic, such as working from home became the norm last year.

More than half of those polled in Sydney and Melbourne said they liked office space as an investment opportunity this year, along with 42% of those polled in Singapore, according to real estate investment firm Colliers International’s Global Capital Markets 2021 Investor. Outlook.

“In this uncertain environment, investors will prefer to deploy capital in lower risk opportunities,” said Terence Tang, Managing Director of Colliers. “First-level municipal offices remain the asset of choice,” he added.

Cities like Sydney, Melbourne and Singapore offer “more stable investments with less volatile income returns” and high-quality assets, he told CNBC “Street Signs Asia” on Tuesday.

In addition, offices with long leases and tenants with “strong credentials” can likely overcome the unpredictability of the global economy, Tang said.

“If you think the office is here to stay and … you’re investing in some good office assets that give you that income security during this uncertain time, I think that’s something people like,” he said. he declared.

But he acknowledged that some believe Covid-19 and remote working will result in “office deaths.”

Morgan Stanley predicted last year that office tenants in Asia could permanently give up between 3% and 9% of their office space.

Tang said it may be “premature” to deregister offices.

“There is a growing conviction that this asset class is still very relevant,” he said, adding that for many people in the region, working from home in the long term may not be. not ideal.

“Especially in Asia where the houses are smaller, when you have a husband and wife in an apartment and they try to talk on their laptops … it’s not as conducive and they can’t concentrate,” he said.

Offices are also still “essential for collaboration and the development of corporate culture,” he said.

– CNBC’s Weizhen Tan contributed to this report.