Asia renews its appetite for big real estate deals
Busan, South Korea (Image credit: Suitqaisdiaries.com)
Once again, Asian investments in international property markets reached new heights.
According to CBRE Research, Asian outbound investment topped USD62.4 billion in 2015, a 37 percent year-on-year increase from the record USD45.5 billion posted a year earlier.
Spurred on by a low-yield environment in Asia, investors led by institutional types in Singapore, China, Hong Kong and South Korea looked abroad for higher returns last year.
CBRE traced a staggering, 167-percent increase in big ticket transactions or deals above USD500 million to Asia.
Outbound investments from Singapore alone reached USD19.3 billion, a 58 percent increase from USD12.2 billion in 2014.
The Lion State bested China’s outbound deployment of USD17.6 billion, a 41 percent increase from a year earlier.
Hong Kong and South Korea were the next-richest sources of capital with USD6.7 billion and USD3.5 billion, respectively.
CBRE observed that Asian investors shifted from targeting “eye-catching headline trophy assets” to portfolio assets, which should allow them to rapidly expand market coverage.
As a result, portfolio deals accounted for 28 percent of outbound investment in 2015, as opposed to 16 percent in 2014.
More: The winners and losers in Asian real estate
CBRE Research Asia senior director Ada Choi attributed some of the outbound investment growth to more aggressive insurance companies as well as expanding property firms.
“We saw more new insurance companies acquiring their first property outside their home country,” Choi told World Property Journal. “Property companies also became more active in the international market, particularly Singaporean groups which were involved in two major portfolio deals over the year.”
Europe, the Middle East, and Africa (EMEA) ceded its place to the Americas as the destination of choice for outbound investors. Propelled by a stronger United States economy, the region increased its share by 109 percent to draw USD22.4 billion in investments of Asian origin.
Although its share decreased from 17 percent to 13 percent, London continued to lead New York, Sydney, Shanghai and other favourite gateway cities by Asian investors.
Mirroring 2014, last year saw a trend of diversification across asset classes, led by the office sector. Asian investors also increasingly sought industrial purchases overseas, partly due to burgeoning demand for warehouse space by the US e-commerce industry.
Source : property-report.com
Read more…Another year, another record for Asian outbound investment
