The COVID-19 pandemic is still throwing curveballs at Asian economies, but the region’s office markets have weathered the crisis and are set for easier times, according to experts from Allianz Real Estate, KKR, Gaw Capital Partners and Colliers International who spoke at an industry event today.
“The recovery is going to be bumpy out of this pandemic, but the good news is that people are getting used to it, quarantines and lockdowns, and, as this transition happens, people are returning to the workplace,” said Rushabh Desai, chief executive for Asia Pacific at Allianz Real Estate.
Desai, whose team has made major office investments in Singapore and Shanghai this year, saw his reading of the market largely seconded by Terence Tang, managing director for capital markets and investment services for Asia at Colliers International, John Pattar, head of real estate for Asia at US fund manager KKR, and Humbert Pang, managing principal and head of China for Gaw Capital Partners who joined the panel discussion.
The four senior executives were appearing at a panel session on office investment in Asia’s core markets on Mingtiandi’s MTD TV video platform. Desai, Tang, Pattar and Pang also dove into ways that office requirements have been reshaped by the pandemic and the impact of tech occupier demand on office leasing, with both topics set to be covered in more depth in future sessions of Mingtiandi’s Office Strategies, which is sponsored by Yardi.
Fundamentals Still Strong
While drop-offs in office occupancy during the pandemic have led some analysts to predict that take-up of desk space could suffer long term as more professionals work from home, Pattar predicts that the market will remain “very strong” as demand continues to grow in the region and added that speculation on the “death of the office is very premature.”
- Rushabh Desai, CEO, Varsity Group Asia Pacific
- Terence Tang, Managing Director, Capital Markets & Investment Services, Asia, Colliers
- John Pattar, Partner and Head of Real Estate, Asia, KKR
- Humbert Pang, Managing Principal and Head of China, Gaw Capital Partners
“With the office, it is about recovery,” Pattar said. “This is driven by demand and supply, the old fundamentals of real estate. If we have economic growth, we have people going into industries and people wanting to be in Singapore, for various reasons that are technology-driven, Hong Kong is about finance, Seoul is a mixture of IT and finance, Japan is still the old economies of finance and economics, then you have growth in Australia with finance centered in Sydney.”
Desai, who is based in Singapore, pointed to the region’s crowded urban centres as making a swift return to the office more likely than in economies where professionals enjoy larger homes.
“In Asia Pacific, we have very densely populated cities and people have smaller homes so there is a natural tendency to come back,” Desai said.
New Requirements Emerge
As workers return to the office they are bringing with them higher expectations for their workplaces, particularly with regard to health and wellness.
“I think, the value of the office, no one is denying that it will stay,” said Colliers’ Tang. However, he said that top tenants will be looking for safer environments to protect their staff, which could ultimately boost rents.
“The requirement of having cleaner air within the building, filtration systems, all of these will be required and that would also mean higher maintenance costs,” he said. The veteran advisor added that these expectations may soon be backed by local regulations.
“Particularly in mature cities like in Australia, Hong Kong, Singapore and even Shanghai and Beijing, I think governments will start imposing incrementally higher requirements in terms of safeguarding the occupants in the building, and that will affect the running cost of the property,” he said.
Tech Reshapes Demand
Gaw Capital, which last year acquired a 96,894 square metre (1 million square foot) office building in Hangzhou which is partially leased to Alibaba, sees office demand in China already back to pre-crisis levels, due in part to demand from companies like the mainland e-commerce giant.

Allianz acquired the Innov Star project in Zhangjiang High Tech Park earlier this year
“Within our portfolio, occupancy is bouncing back to pre-covid time. Demand is very strong, but the tenant profile has changed,” Gaw Capital’s Pang said. He attributes that rebound to the rapid growth of tech companies which are finding fresh markets for their innovations after the dawn of the pandemic.
Allianz’ Desai also pointed to the new economy reshaping the office market, after buying an office property in Shanghai’s Zhangjiang High Tech Park during January of this year for around RMB 2.2 billion ($344 million).
“Another acquisition we’ve done this year was in Shanghai, we bought 90 percent of a technology park asset in Shanghai called Innov Star,” Desai said. “That’s new economy driven demand, so there’s a structural shift going on in China where it’s shifting from manufacturing to services and IT innovation. We invested in business and tech parks because we see the structural shifts taking place in China.”
Future of the Office Up Next
Following today’s discussion, Mingtiandi’s office strategies forum is set to continue on Tuesday 26 October with a panel on the future of the office featuring David Warneford, who leads Australia for Hines; Rico Chan, head of China and co-head of the Asia Real Estate Group for international law firm Baker McKenzie; Midori Suzuki-Tshushima, head of client relations with Tokyo-based Tosei Asset Advisors and Eric Schaffer, chief executive for Asia Pacific at office technology provider Essensys.
- David Warneford, senior managing director and head of Australia, Hines
- Rico Chan, Partner, Baker McKenzie
- Midori Suzuki-Tshushima, Head of Client Relations, Tosei Asset Advisors
- Eric Schaffer, CEO, Asia Pacific, essensys
On Thursday, 28 October Mingtiandi will host a panel titled Asian Capital & Australian Offices, featuring SC Capital Partners managing director Andrew Heithersay; JLL head of capital markets for Australia, Fergal Harris; Real Capital Analytics head of analytics for Pacific, Benjamin Martin-Henry; and David Scalzo, managing director of Melbourne-based developer Perri Projects.
The final session in the office forum, on 2 November, is Assets for Asia’s New Economy, and focuses on how the rise of the tech industry is reshaping office markets around the region. Speakers at that event include Tim Graham, head of capital strategies for Asia Pacific at JLL; Terence Seah, director and head of Hong Kong, Singapore and Shenzhen for global design firm Benoy, and Augustine Chin, a director with Swiss private equity fund manager Asia Green Real Estate.
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