Real estate investors have been monitoring China over the past 18 months, as property markets recover across the world. China and other developing markets in the Asia Pacific region are now being perceived as more appealing to investors, according to analysts.
Greg Penn, Executive Director of Investment Properties for Asia at CB Richard Ellis (CBRE), said, “We’re seeing that core real estate assets are still in strong demand across Asia Pacific.”
“Global real estate investors including private equity, pension funds, and REITS are taking advantage of the still low financing costs on prime assets and continue to tap into the growing pool of capital looking to secure or increase presence in the Asia Pacific region.”
DTZ’s Money into Property report likewise revealed that recovery of the global property landscape is being fuelled by the Asia Pacific region, which witnessed a 14 percent rise in invested stock last year.
It noted that Australia and China, which accounted for 25 percent and 24 percent respectively, led the Asia Pacific regional growth.
Additionally, China has now joined the US and Japan as the third market worldwide with total invested stock exceeding US$1 trillion.
David Green-Morgan, Head of Asia Pacific research at DTZ, believes that developing markets like China dominate the “hot” and “warm” categories in the report.
However, more investors still preferred to invest their money in the more developed markets of Singapore and Japan in Q1 2011.
A report from CBRE showed that Japan attracted the most direct property investment across Asia Pacific in the first quarter, at 37 percent of total investment across Asia Pacific.
Singapore placed second, accounting for 19 percent of the total sales volume in the first quarter.
The investment transaction data from CBRE is based on property deals valued at US$20 million and above. It includes industrial, retail, office and mixed use real estate but excludes development site activities.
Industry insiders believed that investment in China could accelerate if it were easier for foreign investors to enter the market.
Policy measures in China are considered the main concern among investors. The government has worked to keep a stable real estate market by imposing a slew of measures to curb speculation and guarantee market sustainability.
Analysts believe that although recent policy initiatives have been aimed at cooling the residential property segment, the government may consider intervening in the commercial real estate sector if necessary.
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