ASIA-PACIFIC

 
 

Outlook for 2016

Further Volume Growth Ahead

Looking forward, policy changes in the Chinese real estate market and the US interest rate hike are likely to influence investors’ business strategy. However, a Hong Kong private equity fund thinks that the impact of the Fed raising US interest rates will not be severe as investors are well prepared.

With investor confidence remaining high and the majority of investors looking to continue to expand their portfolios, investment volumes in Asia-Pacific are likely to continue to increase in 2016, a thought shared by 48% of investors from the region. Increasingly they will be using higher levels of debt to fund their acquisitions.

Asian investors are likely to continue to search for higher-yield real estate developments due to favourable fundamentals and the availability of capital. The focus is predicted to be on the buoyant office sector in China and Hong Kong as investors continue to chase quality office properties.

Despite high confidence levels, there is an element of caution that is starting to emerge. There has been a significant change in attitudes to risk over the past 12 months and this is likely to impact on the types of properties sought after in the region.

While the market volatility in China has led to a more cautious approach, we do not think there will be any significant drop in investment activity, unless the country’s economy suffers a drastic downturn, which, at the moment, is unlikely. We anticipate

the lowering cost of debt will continue to be a main driver of investment activity and investment volumes in Asia-Pacific in 2016 are set to outperform 2015.

SIX KEY THEMES

THAT WILL SHAPE COMMERCIAL REAL ESTATE IN APAC IN 2016

Australia and Japan primary targets

Australia and Japan are global investors’ preferred destinations in Asia-Pacific, with the key investment locations being Tokyo, Sydney and Melbourne.

Domestic and Overseas Capital remain a mainstay

Joint ventures between domestic players and overseas capital will remain a mainstay of the Australian investment market and will be a growth area in New Zealand.

Cost of debt a main driver

The lowering cost of debt will be a main driver of investment activity in the region.

CBD offices will be the preferred investment sector

CBD offices will be the preferred investment sector for Asia-Pacific investors, followed by development opportunities and industrial and logistics.

More motivated sellers

2016 will see more motivated sellers, which will create more varied opportunities for investment.

50% expect to increase their portfolios

Asia-Pacific investors remain confident and 50% expect to increase their portfolios in 2016.

“The low cost of debt will continue to be a driver

of investment activity. We anticipate rates to remain

at record lows in the short to medium term.

Australian REIT

View the full Global Investor Outlook 2016 Report

Colliers International Global Researchers

Primary Authors

Mark Charlton
Head of UK Research and Forecasting
mark.charlton@colliers.com
+44 20 7487 1720

Bruno Berretta
Senior Research Analyst, EMEA
bruno.berretta@colliers.com
+44 20 7344 6938

Walter Boettcher
Director of UK Research and Forecasting
walter.boettcher@colliers.com
+44 20 7344 6581

Regional contacts

USA
Pete Culliney
Director of Research
pete.culliney@colliers.com
+1 212 716 3698

EMEA
Damian Harrington
Head of EMEA Research
damian.harrington@colliers.com
+358 9 856 77 600

Asia-Pacific
Andrew Haskins
Executive Director, Research & Advisory
andrew.haskins@colliers.com
+852 2822 0511