10 November 2014

Colliers International’s 2015 Global Investment Survey provides insight into the thinking of Asian investors, by far the most active sources of inter-regional capital in the world. Almost half (46%) show a strong bias towards investing outside Asia, whereas globally, only around 18% of real-estate investment is cross-border.

There are some interesting distinctions between the approach in Mainland China, Hong Kong and Singapore investors.

One Hong Kong investor noted that now is the right time to act in China, since the slowdown in property prices is throwing up opportunities. Quality developments are on the market in first-tier cities at significant discounts.

For mainland China, outbound investment will remain strong, with growth continuing to outpace that of inbound investment.

In terms of domestic investment, there are three discernible trends:

  • Investors will continue to re-focus on first-tier cities.
  • There will be increased investment in business parks.
  • The logistics sector will continue to attract many investors, underpinned by the rapid growth in e-commerce, limited supply and the establishment of Free Trade Zone(s).

For Hong Kong, outbound investment is driven by private investors and local families. They will continue to target gateway cities, with New York, London and Sydney the favourite destinations. But they are shifting their attention to the fringes of those cities.

The domestic market will continue to benefit from negative real interest rates. Owner-occupiers, local and mainland developers, and REITs are all on the hunt for decentralized Grade A office buildings, value-added office plays and neighbourhood malls.

In Singapore, outbound investment will continue to be strong, but with investors taking a careful approach in search of stable income. London, Sydney and Tokyo are the top three destinations of choice.

Singaporean REITs and property funds are investing in stable-income assets in mature markets, and even developers are buying office buildings and hotels in these mature markets.  Only a few developers will develop their own projects overseas, such as Oxley in London and Keppel Land in New York, but they will partner with local developers.

The report: http://www.colliers.com/en-us/insights/market-news/global-investor-sentiment-survey-2015