In the coming year, more funds will be provided for the real estate market in the Asia – Pacific as planned by the investors. Based on the survey, 64% of them expect to have increased their buying activity than the previous year. About 30% of the respondents stated that they are expecting 20% increase while 19% of the respondents are looking forward to a 10-20% increase in their purchase activities.
On the other hand, 30% claimed to have the same level of activity as with the previous year while only 4% claimed to have lesser activity this year.
These results were obtained during the Total Real-Estate Investment turnover in the Asia- Pacific region which hit a record of US$ 90.4 billion last year. Some of the foreign investors which exclude respondents who have decided their own market of domicile showed China to be the most preferred location for 28% of the respondents. This is followed by Australia and Japan which obtained the preference of 18% and 15% of the respondents, respectively.
While Australia’s activity is anticipated to be as good, the improvement in the world economy will affect its attractiveness to the foreign investors and the high relative interest.
There is, however, a great expectation that China will maintain a steady flow of deals as capital keeps on the watch for investment opportunities in places where there is a high-quality of commercial assets and good location as well as decentralized zones of Tier 1 towns/cities.
All is good for Japan too as it continues to have a strong demand from both domestic and overseas buyers who are searching for office building with good location in Tokyo. They are also in the look-out for properties in secondary cities. What will pose as threat for Japan is the inadequate stock found in Tokyo.
While the three countries ranked at the top of the respondents, Singapore is at the 10th choice of the respondents. If respondents who have selected their own market will be excluded, then the country will be considered as the 9th.
The odds are against Singapore and Hong Kong since the capital values are at their peaks and adding to it are the government measures imposed to cool down the real estate market. This means lesser activities for the two.
In a further analysis, office sector was deemed to be the top of investment with 32% of the respondents backing it up. Industrial and logistics (29 %) and residential (21 %) sectors also followed. The fourth is the retail sector due to the current cooling sentiment which includes the difficulty in finding quality products and capturing strong retail-sales growth in rents. This is quite a turn for this sector since it has been at the top for the past for two years.
Going back in Australia, the industrial and logistic (11%) sector is favored to be the most-attractive for investment followed by office sectors (10%) and the retail sectors with 5%. China’s industrial and logistic is also at the top with 8% and Japan’s offices with 6%.
Some investments in the industrial and logistics sectors of China were done through indirect funds. This means that the focus is in the development of facilities rather than acquisition of assets in the open market.
Investors for preferred investments were polarized at the extremes of the risk curve according to the survey findings. 44% of the respondents are said to be on the look-out for opportunistic and value-added investments. On the other hand, 29% look for prime and core assets. 21% have preferences for secondary locations.
Reference: Business Times 20 March 2014