Investments in Asia Pacific multi-family properties to double by 2030: JLL

Multi-family properties are set to become a significant asset class within the next decade, as per an October research report by JLL. The volume of investments into multi-family assets in Asia Pacific (Apac) is expected to more than double and could potentially exceed US$20 billion ($27 billion) by 2030. Rising urbanisation, an abundance of renters, and housing affordability issues are all responsible for the projected growth in multi-family investments.

Robert Anderson, director – head of living, Asia Pacific capital markets at JLL, states that investor interest in core multifamily assets has never been stronger. According to him, the multi-family market is rapidly evolving with more investable products coming into the pipeline. He predicts that demand for core multifamily product in APAC will outgrow investible stock in the coming years.

Multi-family investment volumes in Apac outpaced the broader market between January to September this year. Despite a 24% fall in total real estate investment volumes in the region during the same period, investments in the sector grew by 12% y-o-y and reached US$5 billion. Transaction activity was led by Japan, followed by China and Australia.

The rental residential market in Apac looks positive given the increasing number of young to middle-aged people relocating to large cities as well as an ageing population. In Japan, investors are targeting large metropolitan areas such as Tokyo, Osaka and Nagoya.

Australia is currently dealing with a housing crisis due to post-pandemic influx of migrants, which is maintaining the momentum of its build-to-rent market. China’s multi-family landscape is also potentially incredibly profitable, with investors becoming increasingly active in the Shanghai multi-family market.

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The increasing capital being invested into core multifamily markets in Asia Pacific could lead to further yield compression, although at a slower pace than the previous decade. Pamela Ambler, head of investor intelligence, Asia Pacific, JLL, says that conversion plays could be a dominant theme in the Asia Pacific living sector given the mismatch between supply and demand for rental housing, particularly in cities and core locations. This could lead to more capital being deployed to convert underperforming properties into enterprise-managed living projects to capitalise on this imbalance.