A significant majority of real estate investors expect to commit more capital to the Asia Pacific real estate market this year, according to a CBRE report.
In its Asia Pacific Investor Intentions Survey 2014, which gauged the appetite and outlook of Asia-Pacific real estate investors for the rest of the year, CBRE reported total real estate investment turnover in Asia Pacific for 2013 reached US$90.4 billion, a rise of 24 percent year-on-year and the highest figure recorded since the real estate firm began collecting data in 2005.
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Despite the record total reached last year, and various concerns ranging from high pricing to slower economic growth, a majority of respondents indicated that they will continue to commit more capital to the Asia Pacific real estate market, with 64 percent expecting their purchasing activity to be higher than in 2013.
Respondents also identified economic slowdown or weakness as the biggest concern around property investing in 2014 (23 percent), along with the perception that property has become overpriced (21 percent) and the effects of U.S. tapering and rising interest rates (17 percent).
Greg Penn, Managing Director, Capital Markets Asia for CBRE, said: “Despite some obstacles and threats, investors generally retained a positive outlook towards the Asia Pacific region’s longer term prospects.
“Investors are not just planning to commit more capital to the region, they are looking to commit substantially more. The attractiveness of Asia Pacific persists as a result of economic growth levels that remain higher than global averages, long-term demand for quality commercial property and rapid urbanisation.”
Asia has retained a lot of appeal for investors with ‘Emerging Asia’ and ‘Developed Asia’ topping the list of preferred regions to invest in globally, with 23 percent of investors saying they targeted each. There was also strong interest in investing in North America and Western Europe as the recovery in the West takes hold, with 20 percent and 16 percent of investors interested in these markets respectively.
The office sector was identified as the most popular sector for investment (32 percent) followed by industrial and logistics (29 percent) and residential (21 percent).
Within Asia Pacific, China is the preferred destination for cross-border investors – excluding respondents selecting their own market of domicile – followed by Australia and Japan. Australia industrial and logistics, Australia offices, China industrial and logistics, Japan offices and Australia retail were identified as the most attractive country-sectors for investment.
As to which country in Asia Pacific is the most attractive for property investment in 2014, Hong Kong is quickly losing its appeal as investors chase assets or markets that offer higher returns, such as China and Japan.
The survey was conducted between January and February 2014 and covered a wide range of real estate investors, in particular fund and asset managers, private equity firms, banks, insurers, private property companies and REITs. Respondents were primarily based in the Asia Pacific region but global investors with the ability to invest in the region were also included.
Andrew Batt, International Group Editor of PropertyGuru Group,
wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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