According to a new CBRE survey, Asian intentions to invest in commercial real estate assets will remain high this year, with Tokyo being the most active market. However, compared to last year, operation will be reduced. real estate agents in qatar
Danger appetite for prime core assets has increased, according to CBRE's Asia Pacific Investor Intentions Survey 2015, which looks at the outlook and views of investors in the Asia Pacific real estate market. Major markets such as Japan, China, and Australia continue to be the top investment destinations, with other mature markets climbing the rankings, and outbound foreign property investment intentions remaining high in 2015.
The following are some of the most significant property investment results from Asia in 2015:
Tokyo, Shanghai, and Sydney are the most active target markets.
China, Japan, and Australia are the top three nations.
Office properties, distribution services, and hotels are the hottest investment sectors.
The rate of return on investment is still high, but it is decreasing. The Previous Year
According to the findings, investor sentiment will remain optimistic in 2015, with the majority of investors (54 percent) expecting to increase their real estate purchases. This indicates that investors have a deep confidence in Asia Pacific's long-term economic growth and will continue to invest in the region.
Investors' appetite to invest has slowed from last year, when 64 percent said they wanted to buy more real estate in a CBRE survey, while they remain worried about high prices, the supply of investible stock, and the economy's outlook. For the second year in a row, respondents listed high asset pricing as the most significant barrier to acquisitions (31%) and the greatest threat to the area (21%) among respondents. According to CBRE's All-sector Capital Value Index, the rate of price inflation slowed to 6% in 2014, compared to an average of 9% over the previous four years.
"In our opinion, investment liquidity in the regional real estate market will remain plentiful, but transaction flow will be constrained by investment opportunities and pricing. As a result, we expect a modest rise in investment turnover in 2015, of about 3-5 percent year-on-year "Ada Choi, Senior Director, CBRE Research Asia, said, "n-year."
Prime Core Assets are in High Demand.
The slightly lower investment trust is accompanied by a reduction in risk tolerance. Prime core assets were preferred by 43% of survey respondents, up from 29% in 2014.
"The strong demand for prime core assets is fueled by factors such as the desire to preserve capital and lower expectations of unexpected interest rate hikes. Investors seeking prime core assets see Asia Pacific as a key component of their global portfolio diversification and are rising their allocations to the field, led by institutional investors and REITs searching for stable income portfolios with longer holding periods. As a result of the high level of investor demand for core prime assets, we expect more yield compression in this asset class "CBRE Asia Pacific's Managing Director of Capital Markets, Richard Kirke, said.
The low interest rate environment will continue in 2015, thanks to recent rate cuts in major economies such as Australia, China, India, and South Korea, as well as Japan's quantitative easing program. According to the Asia Pacific Investor Intentions Survey, the number of respondents who see this as a challenge has dropped from 17% in 2014 to 9% this year. The US Federal Reserve is also expected to maintain current low interest rates for an extended period of time. As a result, investors will have plenty of opportunities to secure low-cost funding in 2015, helping to boost investment volumes and rates.
China, Japan, and Australia are still among the most popular investment destinations. China, Japan, and Australia remain the region's top investment destinations, with established markets like Hong Kong, Singapore, New Zealand, and South Korea rising up the rankings. This result is consistent with the results of investors who have a lower risk appetite. Investors are concerned about the pace of political and economic change, as well as the oversupply situation, in emerging markets such as India and Indonesia.
The office sector remained the most popular investment destination, followed by the manufacturing and logistics sectors, which benefited from structural upgrades to modern logistics facilities. The hotel and resorts sector experienced a surprising increase in interest to 12 percent from just 1% in 2014, owing to the rise of the middle class and growing incomes fueling a boom in regional travel and tourism. Investor interest in the residential sector has dwindled from 21% last year to 11% this year, with China and Australia remaining the most popular markets for this sector.
Investors are now looking to diversify their portfolios by investing in new industries. According to the results of this year's study, 56 percent of respondents have already invested in alternative assets, with another 62 percent actively seeking investment. Real estate debt was the most common alternative investment form, while investment interest in healthcare and retirement living is far outpacing existing investment, suggesting substantial demand growth in these sectors.
Demand for Investment Outside of Asia Pacific Remains Stable
Asian outbound investment reached a record high of US$40 billion in 2014, according to CBRE's latest study, Asian Outbound Investment: Acceleration and Evolution. Asian investors continue to prepare to allocate capital outside the country. Outside of APAC, 32% of respondents showed an interest in searching for work. South Koreans (69 percent) are expected to be the most successful outbound investors, followed by Chinese and Singaporeans. South Korean investors have moved dramatically to indirect funds and club transactions, a pattern that many Japanese investors have noticed as well.
Although outbound investment intentions are still high, the rate of outbound investment will slow this year. Just 12% said they expect to increase their investment outside the area this year, compared to 29% who said they planned to do so last year. For Asian investors, North America and Western Europe remain the chosen regions.
"Some investors are shifting their attention from Western Europe to North America due to the strong economic growth in the United States. Despite this, EMEA manages to draw a large number of Asian capitals. When it comes to global investing, we're also seeing regional investors diversify their portfolios further. They are less restricted to acquisitions in common developed markets' conventional gateway cities "Ms. Choi said.
The CBRE Asia Pacific Investor Intentions Survey 2015 was conducted online in January 2015 and received over 300 responses (80% of respondents are investors in Asia Pacific). It includes fund or asset managers, private property firms, institutional investors, banks, and real estate investment trusts (REITs).