China firmly set in Asia's top 5 for real estate investment

China remains a top real estate investment destination in the Asia Pacific region with logistics, rental housing and business parks among the most favored assets, according to the latest survey released on Wednesday by global property consultancy JLL.

The country has joined Japan, South Korea, Australia and Singapore in the top five in Asia, JLL's Investor Sentiment Barometer for 2022 showed.

"China continues to rank among the top investment destinations in Asia Pacific, which once again confirms investors' confidence in this market," said Eric Pang, head of capital markets, JLL China.

"Logistics, rental housing, and alternative assets are the key sectors targeted by investors in China with intensifying competition."

With the support of policy and capital, industries such as life sciences, smart manufacturing, and the new generation of information technology, which are developing rapidly in China, is drawing great attention and more capital from investors to business parks, according to the company, which surveyed investment leaders from 37 global and regional investors with combined assets under management of over US$2 trillion.

Despite strong investor confidence in the region, with nine in 10 respondents expecting increased capital deployment towards Asia-Pacific real estate in 2022, investors recognized the need to diversify to offset heightened competition for assets.

JLL said many investors plan to diversify, with assets in the logistics, multifamily, office, and other sectors as targets.

"Competition for assets will emerge as one of the defining themes for the Asia-Pacific commercial real estate market in 2022," said Stuart Crow, chief executive officer of capital markets, JLL Asia Pacific.

"Despite the increased volatility in global equity markets, we see continued competition for real estate assets, and scarcity of product is resulting in many investors focusing on platform deals and M&A."

Logistics will continue to attract more capital this year, with nine in 10 respondents planning to increase their investments from 2021 levels.

Multifamily ranked as the second-most attractive sector after logistics, with seven in 10 investors looking to increase exposure.

The office sector remains core for many investors, with six in 10 respondents planning to increase their investments in 2022.