The emergence of the COVID-19 outbreak in late January and subsequent disruption to business and economic activity pulled down Asia Pacific commercial real estate investment volume to US$22 billion in Q1 2020. This represented a decline of 25% y-o-y* and also marked the lowest quarterly total in almost three years.
Office and industrial turnover was firm but a sharp decline in retail and hotel deals pulled down overall transaction volume.
Investment activity in Mainland China faded from late-January following the imposition of a nationwide lockdown, while purchasing also weakened in Hong Kong. Activity in Japan remained strong but most deals were signed relatively early in the quarter.
Banks have tightened new loans for retail and hotel deals. Although central banks cut policy interest rates during the quarter, borrowing costs have not fallen in tandem, particularly in Korea and Australia.