over the phone with home office, have gone quiet. For the Asian retail property industry, already struggling with social distancing, the loss of tourists and CBD office workers, and a growing appetite among consumers for e-commerce, the absence of flying suitcases is hampering cross-border investment and preventing access to the direct experiences that executives rely on to inject fresh ideas into their shopping centres. When cross-border business travel will ‘normalise’ is highly uncertain. As McKinsey & Company noted in an article on August 13, international travel will “take longer to rebound because of the complexity of government regulations, mandatory quarantines, and the high risk of fast-changing policies”. This applies to Asia in spades, where governments have sometimes been unequal to the task of developing, articulating and then sticking to coherent travel policies. The result is a travelling public that’s often left confused, uncertain and angry.   Discussions have been going off and on for months between governments to try to accelerate recovery. A travel bubble has now been established between Hong Kong and Singapore, which has a limited capacity but could be expanded and perhaps become a model for other bilateral travel bubbles. However, such is the level of fear in the region, progress is painfully slow. So most business travel is still indefinitely on hold. This is not preventing all cross-border investment but it is certainly weighing down on it. Cross-border retail investment is way down According to the United Nations Conference on Trade and Development (UNCTAD), global foreign direct investment fell by 49 per cent in the first half of 2020. Asia was relatively resilient, with direct investment inflows falling by 12 per cent, but this was primarily due to the early recovery of mainland China, which benefited from a large inflow for M&A deals in the information services and e-commerce sectors. FDI in Southeast Asia fell by 20 per cent, with Singapore (down 28 per cent), Indonesia (down 24 per cent) and Vietnam (down 16 per cent) bearing the brunt. Foreign investment flows into commercial property, particularly in the retail sector, have been significantly weaker this year. This is for two reasons. First, poor fundamentals: weak sales, footfall, occupancy and rental income, particularly in tourism-dependent locations. Most landlords have needed to offer rent relief and are under a great deal of pressure to reset rents permanently below their pre-pandemic levels. Key performance metrics have generally held up better for shopping centres in neighbourhoods that are more reliant on local consumers, but generally foreign investors are staying on the sidelines until the economic situation stabilises and travel restrictions are eased. This leads to the second point: investment and decision-making is hampered by the near cessation of business travel, which prevents interaction with physical assets and face-to-face client meetings. Some of the gap can be made up by online conferencing, and multinational companies can use their local offices and partner companies to uncover and further investment opportunities. But often that just isn’t enough. The results have been material. According to Real Capital Analytics, the value of commercial property transactions in the Asia-Pacific region fell by 40 per cent in the year through September. Most of the deals that did occur were struck by in-country investors as outside players stayed on the sidelines. Retailers too have been relatively inactive. Those that have opened stores outside their home countries have done so on the basis of plans that were already in the works before the pandemic. Others are still in wait-and-see mode. The effects are broader than just investment The decline in foreign investment in retail property and the parallel drying up of international store openings are only one dimension of the problem caused by economic uncertainty and the cessation of business travel. Retail property is like any other global industry – it thrives and progresses on the exchange of ideas and the firsthand experiences that only international business travel can bring. For years, the industry has been transformed by cross-fertilisation of ideas, concepts and formats from region to region. These transforming ideas came by way of study tours, conferences and networking events – the complete professional had exposure to all three. Without them, the local industry becomes, over time, inbred and stagnant. This year, the vast majority of major retail conferences commonly attended by international audiences have been cancelled, including International Council of Shopping Centers’ annual Recon event that was to be held in Las Vegas in May and which usually draws an attendance of more than 30,000. In a letter dated October 8, ICSC’s CEO, Tom McGee, told members that a May Recon wasn’t realistic next year either, and postponed the event to early December. ICSC, like other conference organisers, has partly replaced on-site conferences with webinars and virtual events, but in an industry where pressing the flesh is so crucial to building relationships, exchanging ideas and getting deals done, online event delivery just doesn’t cut it. Realistically, while face-to-face client meetings will return at a relatively fast pace once borders are opened, it is going to be a while before international networking events become common again, mainly because they require such a large number of people to be in close proximity to each other over a period of days. Social distancing mandates that extend well into 2021 will scupper most of these large-scale events. Study tours are going to be slow to come back too. Some of these are held in conjunction with the conferences but others are stand-alone tours that hop from city to city by air. Some are formal tours subject to extensive advance planning while others are informal tours by a small group of executives from a single company. They typically incorporate physical inspection of properties and meetings with industry professionals. They also involve discovery of retail concepts that can potentially be transplanted to their own properties back home. For now, these kinds of travel activities are off the table, not just because most international business travel isn’t possible but also because many companies’ budgets will no longer support it. Cross-border business travel will come back but how soon it happens depends on the inclination of governments around Asia to take a more proactive approach than they have so far been willing to do. The Hong Kong-Singapore corridor is a baby step but countries in close proximity that have a good record with virus transmission, such as Thailand, Cambodia and Vietnam, would be promising candidates to open up, at least to each other. With mainland China, Hong Kong, Singapore and Indochina taking the lead, some of those suitcases will hopefully soon be up and flying again.