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A new survey by Colliers International showed that 48 percent of Asia Pacific investors are confident that investment volumes into the region will increase in 2016.
In its Global Investor Outlook for 2016, Colliers found that 91 percent of Asia-based real estate investors plan to invest in the Asia Pacific region in the next 12 months.
Notably, Asia investment volumes increased to US$40.2 billion (S$ 56.5 billion) during the first nine months of 2015 from US$37.1 billion (S$52.1 billion) over the same period last year.
It noted that Asia Pacific’s growth potential as a destination for offshore capital continues to be strong, with around 15 percent of global investors intending to invest in the region.
“We believe that investment volumes in Asia Pacific for 2016 are set to outperform 2015,” said Terence Tang, Managing Director of Capital Markets and Investment Services | Asia, Colliers International.
“While the equities market volatility has led to a more cautious approach in China, we do not think that there will be any significant drop in real estate investment activities; that is, unless the country’s economy suffers a drastic downturn, which I believe is unlikely. We anticipate yield improvement in some Asian Markets and the lower cost of debt in China will continue to support the return of capital to the Asian real estate markets.”
Meanwhile, Singapore investors looking for higher yields may be lured back to Asia due to favourable fundamentals and more attractive asset yields in the region, noted Tang.
“The dearth of suitable opportunities and lower asset yields offered in the key Western markets may further entice some Singapore investors back to Asia to seek for better returns,” he said.
In fact, 50 percent of Asia Pacific investors are expected to increase their real estate portfolios in 2016, with CBD offices as their preferred investment sector.
The survey also showed that Australia and Japan are the preferred destinations of global investors in Asia Pacific, with key investment locations including Tokyo, Sydney, Melbourne, Hong Kong, Shanghai and Singapore.
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