Instos show interest in APAC real estate

The majority of institutional investors (56.7 per cent) have said they will increase their allocations to the Asia Pacific (APAC) real estate market, according to the Investment Intentions Survey 2019.

European investors are leading the charge into the Asia Pacific, with 69 per cent responding that they would increase allocations to that market. They were followed by 50 per cent of US investors.

At the same time, most Asia Pacific investors (48.1 per cent) said they intended to make no changes to their Asia Pacific allocations, with most instead preferring to increase allocations to the US and Europe, at 58.3 per cent and 54.2 per cent respectively.

According to the survey, Asia Pacific investors differed from peers in other regions on investment destinations and investment style.

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Investors also viewed Asia as the region with firm core investment, with pricing of core assets remaining high in the region. The survey said however, that core regained attractiveness, with 37.7 per cent of global investors seeing it as having the best performance prospects in the region in 2019, compared with 25.9 per cent in 2018.

The bounce back suggested that while investors were still taking risk, appetite had lessened since last year’s survey, the study said.

Additionally, all surveyed investors stated they would invest in Asia Pacific’s office sector, followed by 80.6 per cent who said they would invest in industrial and logistics – a higher proportion than last year.

At the same time, 63.9 per cent of investors said they would invest in retail.

Also, healthcare saw a notable uptick in interest, with 16.7 per cent of investors saying they would invest in the sector – up from 10.5 per cent in the last survey.

Globally investors indicated they planned to invest US$28.0 billion in non-listed real estate funds, but in the Asia Pacific, 50 per cent of investors indicated their expectation to increase their real estate allocation in the Asia Pacific through that route.

“Despite pricing issues, investors clearly feel the benefit of these mature and liquid markets, where it is easier to invest. On the other hand, we can see them moving up the risk curve, and looking for more riskier types of investments such as value added and opportunistic strategies,” Amélie Delaunay, ANREV’s Director of Research and Professional Standards, said.