With heightened refinancing costs impacting property values and changing consumer behaviour stifling demand for commercial and residential real estate in the Asia-Pacific region broadly, South and Southeast Asia have stood out with pockets of optimism in this sector. General counsel of two major real estate companies discuss the current situation on the ground, and what future holds for the industry.


The real estate landscape in Asia has been experiencing volatility in recent years with China’s property crisis sending shockwaves across the region.

According to the CBRE, the office real estate market will continue to be awash with a supply boom in the remainder of the year. In the retail space, Asia Pacific will see weaker spending growth in 2024 on the back of the softer economic outlook. Logistics occupiers’ appetite for expansion is expected to moderate further over the next 12 months.

“To protect their bottom line, occupiers will give closer scrutiny to real estate plans and capital expenditure; a trend that will result in more lease renewals. Availability will increase on the back of the ample development pipeline and growing volume of sublease space,” said the CBRE report.

Meanwhile, commercial real estate investment is expected to remain muted in the first half of 2024 but is expected to see an uptick in investment activities in the second half of the year on the back of re-pricing and interest rate cuts. Demand will be led by high-net-worth buyers, cash-rich investors and corporates seeking high quality assets, according to CBRE.


David Lim, Hongkong Land


But some bright spots have been emerging in the sector. In Southeast Asia, things appear to be looking up compared to other parts of the Asia-Pacific region. David Lim, the Singapore-based director and head of legal for South Asia at Hongkong Land, says demand continues to be robust due to strong demographic factors such as a rising population, improvement in standards of living, increased workforce representation and income growth.

“There also continues to be a move towards urbanisation across Southeast Asia, which drives the demand for high-quality residential housing in urban centres,” Lim adds.

Manish Lamba, general counsel at DLF Cyber City Developers, the rental arm of India’s DLF, says his country is witnessing one of the fastest-growing real estate sectors amongst the world’s major economies.

Specifically, Lamba highlights the growing attractiveness of real estate investment trusts (REIT) as an investment avenue as well as an exit option for investors in the Indian real estate market.

“Till date India has seen launch of four REITs (three commercial and one retail), which have now fairly stabilised and are gradually gaining momentum. With adjustment of interest rates, REITs are a good source of alternative investment,” says Lamba.


Manish Lamba, DLF Cyber City Developers


With the success and growing popularity of REITs, the Securities and Exchange Board of India has recently introduced the concept of small and medium REITs in order to enable small and medium-scale investors to participate in the fractional ownership of real estate which they are not able to afford otherwise, adds Lamba.

In Singapore, Lim has noticed a push towards development of regional centres supported by a comprehensive infrastructural framework. He also notes the increased emphasis on value and quality from the part of buyers.

“For example, in Singapore, when we match the very best quality of design and build with a great location, the market continues to respond positively. An example of that is Leedon Green at Leedon Heights that has now 100 per cent sold,” explains Lim.

Throughout 2023, the high interest rates have been weighing on the real estate market in the Asia-Pacific region, resulting in subdued year for leasing and investment. But as the tightening monetary cycle is set to stabilise, if not loosen, in the second half of this year, Lamba has seen some investment bright spots in his sector.

“Fortunately, interest rates have been within the tolerable limits. Presently the SBI PLR is 15 per cent and SBI MCLR is eight per cent, which gives good opportunity to refinance external debt and to restructure the debt instruments,” says Lamba.

Lim of Hongkong Land, however, sees buyer appetite undercut by the heightened cost of financing and the added emphasis on affordability. “Similarly, developers are faced with the reality of increased borrowing costs, which can affect their ability to deploy capital for new projects. In order to address this, we have been collaborating more with partners in order to share expertise and resources, but we have also been more stringent in our due diligence to make sure that we are committed to a location and offering what the market will respond favourably to,” says Lim.

As market turbulence persists to dampen investment enthusiasm, in-house legal teams of real estate companies are tasked with helping their organisations navigate not only regulatory hurdles but commercial adversity as well.

Lim says his team is, more than ever, focused on ensuring that the product rolled out to the market matches the requirements of the buyers. “This is done through efficient design, sustainable construction practices and materials, and strategic and competitive pricing,” he says.

Also, “sizable deals with various partners require legal support in ensuring that all required contracts are in place, potential risks are understood and managed, and that the business understands the applicable laws and regulations in different jurisdictions,” he adds.

When faced with regulatory and compliance pressure, Lim highlights the need for support around the legalities of financing on top of dealing with regulations relating to property development. In addition, when disputes inevitably arise, it’s the legal team which is tasked with coming up with creative resolutions.

“We believe that it is important to not only provide our expertise but to educate our key stakeholders along the way. When everyone understands potential challenges, and risks, the business is always better placed to ride any waves that may come their way,” says Lim.


From transactions to listings, technology has been giving the real estate industry a facelift. In India, Lamba notes that the integration of technology has been transforming the way properties are constructed, bought, sold, and managed.

For example, “the building information modelling (BIM) facilitates designing, construction and maintenance of commercial properties vide 3D modelling and visualisation”; and “3D printing technology accelerates the construction process and augments overall build quality by reducing labour and material costs and reducing health hazards,” explains Lamba.

In addition, Lamba also mentions blockchain technology, which he says is leading to improved overall transparency by bringing better security and efficiency to land records management, property transactions and smart contracts.

Lim in Singapore says Hongkong Land views technological innovation as one of the “key competencies and competitive advantages” and has made significant investments to pilot and implement technologies over the years. “Hongkong Land has always been an early mover in leveraging technology to enhance how our buildings are run and operate,” says Lim.

“From offering the latest in telecommunication connectivity and Internet of Things (IoT) backbone to waste management to SMART building technologies that enable remote monitoring and control, optimise and reduce energy consumption as well as AI-powered automation and optimisation. This helps us not only run more efficient and safe operations, but also to minimise our impact on the environment,” explains Lim.

Other technologies that Hongkong Land has implanted on a building operation level include AI/machine learning energy management optimisation and asset automation; integrated building management systems; advanced analytics including intelligent video analytics; and collaborative operational and data sharing platforms.

In addition, “We build partnerships within the startup ecosystem, together with our peers, academics, governments, and VC funds to accelerate the real estate industry’s adoption of technologies and collectively solve common but difficult challenges such as scope 3 carbon emission reduction,” adds Lim.

Looking forward, the real estate landscape in Asia is fraught with challenges, but it also has opportunities embedded in it. In the short to medium term, Lamba expects that there would be changes in the tenancy laws and other legislations which would directly impact India’s real estate industry.

“As a stakeholder, we are participating in the legislative consultative process to ensure that the law response to the needs and requirements of all stakeholders,” adds Lamba.

Lim believes that the demand for existing developments at Hongkong Land will remain resilient as the company continues to focus on affordability, effective corporate governance, sustainability, and at the end of the day, their customers.

“Our objective is to ensure that every buyer of our residential properties and tenant in our office and commercial properties are considered in everything we do. This includes providing living and working spaces which meet both the physical and emotional needs of our customers,” says Lim.



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