News release

China commercial real estate investments register 21% growth in 2021

Asia-Pacific commercial property investments up 26%, hitting pre-pandemic levels

February 18, 2022

Tammy Hu

Head of Marketing, China
+86 21 6133 5387

Shanghai, February 17, 2022 - Asia Pacific’s commercial real estate market attracted US$177 billion in direct investments in 2021, with capital deployment volumes returning to levels last seen in 2019. According to data and analysis published in JLL’s Asia Pacific Capital Tracker 4Q21, full year 2021 investment volumes rose 26% year-on-year. Transaction volumes in China reached US$39 billion (253.8 billion yuan), representing 21% year-on-year growth and emerging as one of the markets that rebounded strongest in 2021.

Asia Pacific logistics investment continues its upward trend, while retail and hotel investment see a solidified recovery

In 2021 logistics investments reached US$48 billion, representing 50% growth year-on-year and a doubling of allocations since 2019. Investor interest in larger deals of over US$300 million intensified, with JLL data showing a fourfold rise in total capital deployed into this sector over the past two years. JLL predicts interest will grow – supported by robust rental growth in Asia Pacific and investors’ desire to further reposition their portfolios – despite a compression in logistics yields.

The office market continued to show signs of recovery as investors deployed US$74 billion – up 17% year-on-year. This ensures the sector remains Asia Pacific’s most liquid real estate asset class. JLL forecasts interest in offices to rise by between 20% and 30% in 2022 as rents and occupancies stabilize and investors focus on quality, health and safety when investing in office buildings.

A recovery in consumer spending and attractive yields inspired investor confidence, fueling a renewed interest in Asia Pacific retail assets investments. Retail transactions rebounded 67% year-on-year, resulting in US$36 billion in transactions.

In 2021, hotel sales reached US$8.5 billion with a year-on-year growth of 39%, and active markets such as China, Japan, South Korea and Australia represented over 80% of total APAC transaction volume. This rise may be attributed to the gradual recovery of cross-border travel and investors taking a long-term view of the tourism industry.

“Asia Pacific real estate’s recovery was solidified in 2021 as investors put more capital to work and demonstrated their long-term confidence in the real estate sector by diversifying investments across geographies and sectors. Investors remain underinvested in Asia Pacific property but through our conversations we believe there exists a strong conviction to increase exposure in 2022 with a real focus on larger deals and platform acquisitions. We remain steadfast in our view that investment volumes will hit US$200 billion this year,” says Stuart Crow, JLL’s CEO of Capital Markets for Asia Pacific.

China logistics and alternatives sectors favoured by investors

Commercial property investment in China was active in 2021, with a total transaction volume of 253.8 billion yuan, representing 21% growth from the previous year. Investments in offices remained the largest component, accounting for 37% of the total transaction volume. Logistics transactions grew significantly, rising from 16.9 billion yuan in 2019 to 38 billion yuan in 2020 and climbing to 59.1 billion yuan by 2021, and its proportion in the total trading volume increased significantly from 5.3% in 2019 to 23.3% in 2021; Large scale portfolio transactions boosted retail investments, while alternatives transactions hit a record high.

With the appeal of a stable business environment with steady returns, Shanghai remained the most popular investment destination among Chinese cities, attracting over 40% of total investment. Beijing also proved to be a preferred destination with scarce supply of traditional asset types in core areas.

2021 marked an important year for investors as China launched REITs, which accelerates in liquidity and transparency in the market. The 13 pilot REITs have outperformed expectations since inception.

Rental housing was another sector which drew continued interest in 2021, especially with numerous government policies and initiatives promoting this sector. A changing urban landscape as well as strong demand in rental housing motivated investors to seek assets with an angle towards multi-family potential. These include repurposed industrial and office asset types in strategic locations.

“Influenced by structural deleveraging in the China market this year, developers have been selling assets over the past year in exchange for liquidity. On the other end, investors capitalized this unique opportunity to acquire assets, while self-use buyers kept their portfolio expanding.”, says Eric Pang, Head of Capital Markets, China, JLL. “In 2022, with expected interest rates cuts and easing policy, the property market will be injected with more confidence and stability, so we predict even more active investment and transitions in the long run.”

Read more in the latest edition of the Asia Pacific Capital Tracker here.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.6 billion in 2020, operations in over 80 countries and a global workforce of more than 95,000 as of September 30, 2021. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit