Commercial Real Estate - Eastern Asia

The Commercial Real Estate market market in Eastern Asia is projected to reach a value of US$33.91tn in 2024.
This market segment is expected to show an annual growth rate (CAGR 2024-2029) of 0.15%, resulting in a market volume of US$34.16tn by 2029.
When compared globally, the United States is anticipated to generate the highest value in the Real Estate market, with US$25.3tn in 2024.
In China, the commercial real estate market is experiencing a boom with a surge in foreign investments and a growing demand for office space in major cities.

Definition:

Commercial real estate can be defined as properties that are used for business purposes, such as office buildings, retail spaces, warehouses, and industrial properties.

Additional information:

The commercial real estate market contains the value of commercial properties as a key performance indicator. This is the worth of all office buildings, retail spaces warehouses, and industrial properties for the timeline of our data coverage.

Office buildings
Retail spaces
Warehouses
Industrial properties

Residential real estate
Publicly owned buildings used by the local government
Buildings used for public health care services

The Commercial Real Estate market in Eastern Asia is experiencing significant growth and development. Customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors are all contributing to this positive trajectory. Customer preferences in Eastern Asia are driving the demand for commercial real estate. With a growing middle class and increasing urbanization, there is a need for more office spaces, retail stores, and industrial facilities. Additionally, foreign investors are attracted to the region's strong economic growth and stable political environment, further fueling the demand for commercial properties. Trends in the market show a shift towards mixed-use developments in Eastern Asia. Developers are incorporating residential, commercial, and recreational spaces into a single project to meet the diverse needs of the population. This trend is driven by the desire for convenience and accessibility, as people prefer to live, work, and play in the same area. Mixed-use developments also promote sustainability and reduce the need for long commutes, which aligns with the increasing focus on environmental consciousness in the region. Local special circumstances in Eastern Asia contribute to the development of the commercial real estate market. For example, in countries like China and Japan, where land availability is limited, developers are focusing on vertical expansion by constructing high-rise buildings. This allows for the efficient use of limited space and maximizes the potential for commercial development. In addition, government policies and incentives play a crucial role in encouraging investment in the commercial real estate sector. Governments in the region are implementing measures to attract foreign investors, such as tax breaks and streamlined approval processes. Underlying macroeconomic factors also contribute to the growth of the commercial real estate market in Eastern Asia. The region's strong economic growth, driven by sectors such as technology, finance, and manufacturing, creates a favorable business environment. This, in turn, increases the demand for commercial properties as businesses expand and new companies enter the market. Additionally, low interest rates and ample liquidity in the financial markets make it easier for developers and investors to access funding for commercial real estate projects. In conclusion, the Commercial Real Estate market in Eastern Asia is experiencing growth and development due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. The demand for commercial properties is driven by the region's growing middle class, urbanization, and foreign investments. Mixed-use developments, vertical expansion, and government incentives are shaping the market trends. Strong economic growth, low interest rates, and ample liquidity further contribute to the positive trajectory of the commercial real estate market in Eastern Asia.

Data coverage:

Figures are based on value of commercial real estate.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach. As a basis for evaluating this market, we use national statistical offices. Next, we use relevant key market indicators and data from country-specific associations such as share of industry, manufacturing, and services of the GPD, price level index, GDP. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the market, for example, exponential trend smoothing.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

After a challenging period during the coronavirus pandemic, the European commercial real estate sector now faces additional pressures, including inflation, record-high interest rates, and sluggish economic growth. In 2022, these challenges were evident through contracting investment volumes in the two largest markets—the United Kingdom and Germany. Although the shifting economic landscape has impacted all commercial real estate subsectors, industrial and logistics—a property type that demonstrated incredible resilience during the pandemic—continues to be the most popular investment class. The performance of the sector is closely tied to the state of the economy, explaining why cities with flourishing capital markets garner the most interest from investors. In 2023, investors identified London, Paris, and Madrid as the three most attractive markets.

Growing demand for industrial and logistic real estate is prominent in Europe, driven by the increase in online retail sales rather than in-store. All the Nordic countries saw steady growth in their e-commerce sales during the past fifteen years and more, and the growth is expected to continue. Investments in the industrial and logistic real estate industry have generally been at a higher level during the last few years. The highest investment value among European countries in the first half of 2021 was in the United Kingdom, while Sweden topped the list among the Nordic countries, and was fifth in terms of industrial and logistics investment in real estate in Europe that year.