Corporate real estate investment disposals surge to record US$44.4 bil in 2021: CBRE
According to a capital markets report by CBRE, corporate real estate investors in the Asia Pacific closed a combined total of US$44.4 billion ($61.12 billion) deals relating to disposal activity in 2021. The market saw 762 deals completed last year as sellers capitalised on strong pricing to offload some assets.
About 73% of corporate sales activity in the region last year generally involved the disposal of older assets that commanded strong pricing due to upbeat market conditions. CBRE says that most buyers tend to go into these deals with the intent to undertake value-add or development strategies.
Meanwhile, the remaining 27% of corporate sales in the region last year involved sale leaseback deals, with companies adopting this strategy to enhance their balance sheet and reinvest their core business. Most of these buyers were core funds and institutional investors.
The industrial sector accounted for 24% of disposal deals and 34% of sale leaseback transactions in 2021. The sector comprised different types of companies with diverging reasons for disposals. For example, some airline companies sold off some assets to raise capital while logistics businesses sought to monetise assets by capitalising on favourable market conditions for industrial properties.
Mainland China recorded the bulk of the disposal activity, raking in US$13 billion in 2021. Most transactions involved the sale of development sites and older assets for redevelopment. Meanwhile, South Korea also saw a notably high volume of corporate disposals of about US$7.5 billion. Most transactions involved older retail and office assets for redevelopment.
CBRE expects 2022 to be another strong year for corporate asset monetisation in Asia Pacific, and this sales activity is expected to grow by 5% to 10% this year. — Compiled by Timothy Tay and Atiqah Moktar