China remains Asia Pacific's most robust economy
China remains the most robust economy in the Asia Pacific with three of its cities ranked in the region's top 10 for real estate investment and development prospects, according to a joint report released on Friday by the Urban Land Institute and PricewaterhouseCoopers (PwC).
Shanghai is ranked seventh for investment opportunities in 2021, unchanged from a year ago, and eighth in development prospects, a slight drop from 2020's seventh spot. The rankings are derived from opinions of close to 400 real estate professionals, including investors, developers, lenders, brokers and consultants.
Shenzhen and Guangzhou are ranked ninth and 10th respectively for investment prospects. For development prospects, Shenzhen ranks fifth and Guangzhou 10th.
"China's strong economy, combined with increased demand for alternative finance resulting from a regulatory squeeze on domestic bank lending, has boosted opportunities for foreign investors, particularly those with boots on the ground," said Hei Ming Cheng, chairman of ULI Chinese mainland. "There has been a focus on tapping domestic demand, and foreign capital also sees China as an important destination despite ongoing geopolitical uncertainties in the world."
China's economy has rebounded due to successful containment of COVID-19, with gross domestic product posting 4.9 percent growth in the third quarter of 2020, according to official data.
Of all property types, logistics will probably be the strongest asset class emerging from the pandemic as demand remains steady, driven by a number of cyclical and structural factors such as robust growth in e-commerce.
"China is well placed to take advantage of opportunities in data centers and logistics, which are the sought-after asset classes," said Sally Sun, PwC China assurance partner. "China has seen incredibly fast growth in data centers with spending of almost US$1.5 billion in technology, telecommunication and data center deals recorded in 2020. It also remains the biggest market for new logistics construction, given its huge and rapidly expanding market, together with a structural undersupply of logistics facilities."
Across the region, Singapore, Tokyo and Sydney, all promising a sense of safe harbor in an increasingly hostile global environment, remain the top three markets for investment and development prospects in 2021.