Investor sentiment toward the real estate sector is displaying signs of optimism, as indicated by a recent survey conducted by WTW.
The survey, focused on companies in the Asia Pacific region (APAC), revealed that approximately 54% of respondents anticipate an overall increase in the value of their assets over the next two years. Despite experiencing one of the most profound downturns in recent memory, about 68% of firms expect to witness improvements in rental rates.
Ben MacCarthy, Head of Real Estate, Hospitality, and Leisure, Asia at WTW, highlighted the industry’s resilience in the face of market challenges. He stated, “Despite the market headwinds, the real estate industry remains very energetic in addressing these, turning challenges into opportunity.”
Moreover, the survey found that 60% of firms view property technology as a significant opportunity in the coming years, with a particular focus on proptech and artificial intelligence (AI), which have the potential to be transformative.
MacCarthy elaborated on this trend, noting, “We found APAC firms pursuing innovative solutions through proptech, with a focus on SMART buildings and improving ways data is accessed accurately especially to adapt to ESG and climate regulations.”
However, concerns regarding insurable risks persist among respondents, with 71% citing cyber threats as their primary concern, followed by public liability (68%) and geopolitical risk (65%).
While 55% of respondents reported being impacted by climate-related losses, only 5% expressed confidence in their insurance coverage‘s ability to address severe impacts from extreme weather events. Additionally, 63% expressed uncertainty regarding the adequacy of their insurance coverage.
MacCarthy emphasized the importance of adopting a strategic approach to enhancing risk management strategies, ensuring comprehensive data access, and securing adequate insurance coverage. He stated, “This becomes increasingly vital with the rise in frequency and severity of extreme weather events, growing cyber and geopolitical risks requiring a resilient and adaptable risk management framework.”
The WTW’s Global Real Estate Risk Outlook Report gathered insights from 350 companies worldwide, including property investors, asset managers, and pension funds.
