No slowdown from Asian investors into foreign markets

Asian real estate investors are most likely rich, but crazy? Well not when it comes to property investment, according to CBRE’s head of research for APAC and EMEA Dr Henry Chin. And CBRE’s latest research shows there is unlikely to be a slowdown in Asian investors looking to invest in property this year. Singaporean and Korean investors are expected to be the most aggressive in acquiring commercial property outside of Asia Pacific in 2019, driven by a need to diversify and create stable income streams. This is in contrast to Hong Kong investors a couple of years ago who were chasing capital value gain with their real estate investment deals. It is also in part due to capital rates in places such as Singapore (2.27% on average); Tokyo (2.5% on average) and Beijing (3% on average) being less advantageous than London, Europe and the US. However, it is all about timing when it comes to Asian investors and assuming a five-year average hold by investors, CBRE’s research forecasts that this year and next year present an attractive buying opportunity for them. And in spite of Brexit, London is still attractive for Asian investors as it is still the most liquid market in Europe. CBRE’s research has the capital sitting in third – behind New York and Los Angeles – for total investment activity in 2018, with Paris in fifth spot and Frankfurt and Berlin taking positions 19 and 20. The capital is attractive to Asian investors from a rental value and capital value view point, as well as the depreciation of the pound by around 11% compared to the US dollar. In addition, the capital’s tendency for buildings let on long leases make interesting investments to Asian investors looking for a stable long term income as the average lease term in Asia is about three years, which provides little income security. 64% of Asian investors are will hold property long term, according to CBRE. To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette