Increased focus on domestic and intraregional opportunities
Asian real estate investors are increasingly turning their attention to projects on home turf, due to a combination of political uncertainty within Europe and the US combined with improving returns on assets within Asia, writes JLL’s Asia Pacific CEO, Anthony Couse in Nikkei Asian Review.
Here’s a five-point breakdown of Couse’s analysis:
1. China is still bullish across the board
With the US rejecting the Trans-Pacific Partnership, China’s influence in the region grows ever more significant as they push the Regional Economic Partnership. China doubled FDI in six Southeast Asian countries last year.
China’s government has stated it will encourage investments deemed to bring “good social and economic benefits and conform to the Belt and Road Initiative.”
2. Confidence in Malaysia is rising
If you’re not sure whether Malaysia makes a strong investment, just ask China which is now the top real estate investor in the country, having poured in USD2.1 billion in the past three years. Chinese e-commerce site Alibaba is also set to launch a logistics hub near Kuala Lumpur International airport – the company’s first outside of mainland China.
“Many people see Malaysia as an emerging hub next to Singapore. Malaysia may not be able to take all of Singapore’s business but it is a good choice (logistically),” a source from Alibaba told Reuters.
3. South Korea looks inward
South Korea’s has seen a 75 percent increase in domestic investment in the last year (USD12.4 billion) as compared to the year before. The bulk of investor appetite was seen in the office sector from corporate and institutional investors.
4. Tokyo 2020 Olympics is already a money spinner
The upcoming Olympic’s as well as ongoing tourism boom is seeing investors from around the region planting money in Tokyo, Osaka and Nagoya. Increased land is being put on the market to build apartments and hotels.
5. Australia remains top dog
Australia is still the top property investment destination in the region, with the country’s transparency, substantial liquidity in buying and selling assets and healthy yields all drawing in Asian investors by the boatload.