Global Institutional Investors Bullish On Asia Pacific Real Estate Prospects In 2020, A Recent Survey Shows

March 19, 2020 — About 77.5% of global institutional investors are looking to increase their real estate investment allocation to the Asia Pacific, the Asian Association for Investors in Non-listed Real Estate Vehicles Limited (ANREV) Investment Intentions Survey 2020 showed. 

In terms of volume, the survey showed that global investors are planning to place a total of US$32.3 billion of new capital in the Asia Pacific in 2020. This is the thirteenth edition of the survey which attracted 140 respondents: 125 investors (89.3%), and 15 funds of funds managers (10.7%).

Among the main reasons for investment cited by the survey respondents include expert management, access to new markets and diversification benefits. The main obstacles cited, however, were transparency and market information, availability of suitable products and currency risk exposure. 

By location, Australia remains the most preferred investment destination within Asia Pacific markets, with Sydney and Melbourne chosen as the preferred investment locations for the last four consecutive years. Tokyo occupies the third spot and Osaka the fourth.

By sector, office spaces remain the top investor preference for 2020 followed by industrial & logistics and residential. Retail moved down to the fourth spot. 

By location-sector combination, Melbourne-office and Sydney-office occupy the first two spots in the investment destination- sector combination’s ranking for the second time in a row, while Tokyo-residential rounds up in third, moving up from seventh in 2019. The report also said that apart from China Tier 1 cities industrial/logistics, the top ten sector destinations in the Asia Pacific remain largely dominated by the mainstream sectors in Australia and Japan, the largest investment markets in the region.

By investment vehicle, 58.3% of institutional investors said they prefer to invest in non-listed real estate funds and private real estate investment trusts (REITs) while 36.4% prefer joint ventures and club deals while 28.9% want directly held real estate. 

Globally, a minimum of US$101.3 billion worth of new capital is expected to flow in the real estate sector this year, of which 31.9% is planned to be deployed in Asia Pacific, 45% in Europe and 21.9% in the US.