Property investors in Asia are more reluctant than their counterparts in other regions, according to Colliers International’s Global Investor Sentiment Survey 2011.
The international property consultancy group said a significant 77 percent of the respondents in Asia expressed intentions to stay put on their risk curve, compared to 36 percent in Canada, 40 percent in Latin America and the US, 50 percent in the Middle East, 57 percent in Europe and 65 percent in Australia and New Zealand.
About 71 percent of investors worldwide “indicated that they are likely to expand their real estate portfolios in the next six months, up from 60 percent recorded in 2010. However, most of them are only interested in their respective regions, when looking to expand,” said Piers Brunner, Chief Executive of Colliers International in Asia.
In Asia, 65 percent of the investors remained keen to expand their portfolios as part of their investment strategies in the next six months.
Brunner said that office, residential and industrial / logistics properties are popular acquisition targets by investors in Asia.
“In particular, industrial/logistics assets in Singapore are being targeted by both institutional investors and property companies. Other property types that are being favoured by investors in Asia include office assets in Beijing and Shanghai, and residential properties in India.”
However despite their willingness to purchase, only 23 percent of the investors in Asia are willing to take on additional risks to achieve superior returns, while the remaining 77 percent indicated their preference to stay put on their risk curve.
Meanwhile, older commercial properties are increasingly being challenged by competitive new developments equipped with modern, functional features. As such, 65 percent of Asian investors said that the ownership of older commercial properties poses a bigger concern today than it did 10 years ago.
“The requirements of commercial space users have changed to keep up with times and their business needs, rendering older developments functionally obsolete. Location of the property is no longer the determining factor, if the asset’s features are not up to par. This finding is also consistent across the globe,” said Dennis Yeo, Managing Director of Colliers International Singapore and Investment Services in Asia.
In Singapore, more commercial building landlords are authorising property redevelopment and enhancement works in older buildings, such as the Straits Trading Building, One Raffles Place and Six Battery Road.
Looking ahead, Colliers said Asian investors are generally optimistic and are anticipating the cycle to forge ahead in the next 12 months. “However, there are 28 percent of the respondents who expected the cycle to pass its peak and consolidate during the forecast period.”
Conducted from 1 to 14 August 2011, the Global Investor Sentiment Survey 2011 polled 360 major institutional and private investors around the world. It aimed to provide insights into the risk appetite, optimism and key concerns of property investors worldwide, as well as the overall property investment market outlook.
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