(Bloomberg) -- Blackstone Group Inc. expects demand for residential apartments to be resilient in some parts of Asia as millennials are renting their homes rather than buying them.

Housing markets in major cities in Australia, China and Japan are booming, spurred by low interest rates and improving sentiment among investors who believe the worst of the pandemic is likely over. Retention and renewal rates for apartments have been topping expectations, according to Alan Miyasaki, head of Asia real estate acquisitions.

“We are big fans of multifamily residential,” he said in an interview in Singapore last week, referring to apartment buildings. “In Asia, in terms of existing stock, we have a lot in Japan but we are seeing upcoming markets in places like Australia and China and we are spending time there.”

High property prices in major Asian cities have also made home ownership more difficult for younger generations, boosting demand for rental apartments. For instance, a several-fold surge in home prices in China over the last decade has made markets such as Shenzhen less affordable than London.

Beyond apartments, Blackstone continues to focus on commercial property opportunities linked to the technology, logistics and life sciences sectors in Asia, especially in India, according to Miyasaki. The private equity firm is already the largest commercial real estate owner in the country, with about $9 billion invested in office space, shopping malls and hotels.

In China, the New York-based buyout firm completed the acquisition of a majority stake in a Guangzhou urban logistics park, the largest in the Greater Bay Area, for $1.1 billion earlier this year. Last month, Blackstone announced the purchase of the Sandcrawler, an eight-story office building in Singapore whose design was inspired by the Star Wars movies.

Even though Blackstone inked a deal in April to divest a portfolio of warehouses and logistics properties in Australia for A$3.8 billion ($2.9 billion), Miyasaki said they will continue to invest in similar assets as well as high-quality properties that provide strong returns.

Blackstone has eight offices in Asia, and the Singapore-based executive pointed to the firm’s presence across the region as an advantage in terms of scouting opportunities during the coronavirus pandemic. With Australia’s borders closed, for example, Miyasaki relied on his team there for the local perspective.

“Covid exposed a number of issues out there,” Miyasaki said. “We have always thought having people on the ground was important but during Covid, it became absolutely critical.”

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