APAC Macro Outlook
RESILIENT GROWTH AMID ECONOMIC UNCERTAINTY
The Asia Pacific region is experiencing dynamic growth with varied short-term growth trajectories. Advanced economies like Australia and Japan are seeing slow to minimal growth, while emerging markets like India, Vietnam, Indonesia and the Philippines are leading with strong levels of domestic consumption, foreign direct investment and ongoing infrastructure development. Looking ahead, regional growth is expected to stabilize at around 4% from the second half of 2024 through to 2025-26. Against this backdrop of robust growth with prevailing economic uncertainty, how has the region’s sectors and asset classes performed? Where are the opportunities and which markets and sectors will emerge as best performing in 2024 and beyond?
The APAC Macro Outlook 2024 report provides a concise analysis of the Capital Markets, Office, Industrial, Retail and Alternatives sectors, covering their current state, key trends and outlook for the rest of the year.
KEY TAKEAWAYS
Economy
Robust economic regional economic growth led by emerging markets in 2024 before growth is forecast to normalise the year after, while current slow growth in advanced economies is expected to accelerate through 2025.
Capital markets
Transaction volumes have likely found nadir across most sectors as investors gain greater conviction that interest rates cuts are on their way. Expect activity to improve over H2 2024 before accelerating more meaningfully through 2025.
Office
The region continues to demand more office space, with India forecast to lead regional demand over the near- to medium-term leading to average regional demand of approximately 80msf per annum. However, vacancy will tick up as new supply continues to enter the market, supressing stronger rental growth.
Industrial
Overall, industrial remains a strong growth sector but performance will be bifurcated across the region reflecting local supply and demand dynamics. Expect ongoing evolution in the location and specialisation of the region’s manufacturing hubs.
Retail
Underlying population growth and a rising middle class will continue to fuel floor space retail growth, especially in emerging markets. The near-term outlook appears K-shaped, with greater performance in non-discretionary and luxury goods, while discretionary retail is likely to under-perform.
Alternatives
Secular demand drivers continue to favor most alternatives, especially those with residential underpinnings and data centres.
RELATED INSIGHTS
ASIA PACIFIC CAPITAL MARKETS OUTLOOK
REWORKING LEASE EXPIRIES
U.S. Macro Outlook
