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SG Asia's rich continue to house hunt overseas

Property Here - Thursday, August 01, 2013

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With limited properties available in their home countries, Asian investors could park up to US$150 billion (S$190.6 billion) in property investment in global gateway cities over the next five years, according to a CBRE report. 

Currently, wealthy Asian institutional investors control a fifth of global institutional capital. However, they also face challenges relating to the current low global interest rate environment and weak stock market performance.

“The lack of overseas investment experience, regulatory restrictions, limited investable stock and aggressive pricing has posed significant challenges for investors seeking to expand their portfolios within the Asia Pacific region. This has prompted Asian institutional investors to seek opportunities overseas, with core assets in gateway cities, the most sought after asset class,” noted CBRE.

Outside Asia Pacific, Asian investors invested nearly US$9 billion (S$11.4 billion) in 2012 from US$2 billion (S$2.5 billion) in 2008, with the focus mainly on Europe. 

With the rising interest for low-risk alternative asset classes, more investors are expected to increase their allocation to real estate by around 2.5 to 3.5 percent in five years' time, allowing a steady growth of asset size of four to six percent per annum.

“Given the numerous challenges they face domestically, most groups are likely to target other major markets, particularly Europe and North America,” said Chris Ludeman, President for Global Capital Markets at CBRE.



Nikki De Guzman, Junior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email nikki@allproperty.com.sg