-- More than 620 Investors Represented in Benchmark Study for Direction of Investment Markets
Over Next 12 Months--
Shanghai, 3 November 2014 – Global commercial real estate services firm Colliers International today announced the release of results from its benchmark 2015 Global Investor Sentiment survey. Globally, 67% of investors are looking to expand their portfolios and increase investment. Some other key themes from this year’s survey include that investors are building on the greater risk appetite they adopted in 2014; capital remains primarily domestic; investors continue to look to “safe-haven” cities; debt is back as a driver in the market; and for the third consecutive year central business district (CBD) office property remains the most popular direct investment sector.
Specific to the Asian market, the study reveals that investors hold continued optimism for the coming year. In fact, a majority of Asian investors (74%) plan to expand their real estate portfolio over the next six months, up from 69% last year. And more than half of Asian investors said that they were likely to take on more risk over the next 12 months in order to achieve superior returns.
“The 2015 Global Investor Sentiment survey was revealing—we learned that market liquidity remains a concern for most Asian investors after seeing a fall in sale transaction volumes in individual markets in the past 12 months,” said Terence Tang, Managing Director, Capital Markets & Investment Services I Asia at Colliers International. “Additionally, development opportunities have become increasingly popular in traditional markets where returns have been severely compressed.”
Tang, who will share the survey findings at the PERE Global Investor Forum, 4 – 5 November, added: “The 2015 Global Investor Sentiment Survey is one way by which we at Colliers International provide our clients with expert capital markets advice at a local, regional and global level.”
Some additional key findings for Asia include:
Sound property market fundamentals. Asian real estate investors remain confident when allocating capital to the region as they continue to be attracted by sound property fundamentals and long-term economic growth in Asia. The proportion of Asian investors who believe there will be an improvement in investment conditions over the next 12 months is down to 39%, compared with 62% last year.
Stronger volume growth ahead. Going forward, the vast majority (73%) of Asian investors believe investment volumes will further increase in 2015.
China sits on top. 41% of Asian investors indicate they plan to invest in China over the next 12 months.
Singapore and Hong Kong ranks 2nd and 3rd. 36% and 33% of Asian respondents respectively prefer Singapore and Hong Kong due to their solid property market fundamentals.
Top three factors influencing investment decisions. Property fundamentals, economic growth in the region and the yields remain top three influencing factors, unchanged from the previous two years. Market liquidity is another concern for most Asian investors after seeing a fall in sale transaction volume in the past 12 months.
The most-preferred sector. 61% of respondents indicating that they intend to target CBD offices within the next 12 months.
Residential is the second most sought-after sector. Residential is named by 42% of respondents as the second most sought-after sector due to the sustained demand to upgrade existing stock and the positive demographics in the region.
“In 2015, we will see 3 major trends in China’s real estate market. Investors will continue to focus on 1st tier cities next year and we will also see more investment in business parks market. Underpinned by the rapid development of e-commerce and the establishment of Free Trade Zones in Shanghai and Qianhai Shenzhen, demand for logistic properties will grow rapidly. ” said Lina Wong, Managing Director of East and South West China and China Investment Services, “Outbound investment activities will remain strong next year, with growth continuing to outpace that of inbound investment.”
The 2015 Global Investor Sentiment survey canvasses opinions globally from major investors across a broad spectrum ranging from institutions to private equity. This year, responses were captured from more than 620 investors from the United States, Canada, Latin America, Australia and New Zealand, Asia, Europe, United Kingdom, Middle East and Africa.