According to new CBRE Group study, Asian investment in global commercial real estate is on track to set a new record in 2016, with the Americas becoming the most popular destination. مناقشات
New York, London, Hong Kong, San Francisco, and Chicago are some of the most well-known cities in the world. Growth is fueled by an explosion in private wealth, deregulation, and the quest for yield in the top target cities.
In the first half of 2016, Asian investors invested nearly $27 billion in global commercial real estate, with Chinese investors accounting for 60% of the total. From $4.3 billion in 2009 to $47 billion in 2015, Asian outbound investment has increased by more than tenfold. In 2009, domestic markets accounted for roughly 80% of Asian investors' capital outlay; this proportion has gradually declined in subsequent years, dropping to 47% in 2015.
In H1 2016, Asian investors demonstrated a strong appetite for American properties, with the Americas ($14.0 billion) accounting for more than half (52%) of outbound investment, followed by EMEA ($6.1 billion/22%), Asia ($5.4 billion/20%), and the Pacific ($1.6 billion/6%). New York ($4.02 billion), London ($4.01 billion), Hong Kong ($2.12 billion), San Francisco ($1.40 billion), and Chicago ($1.34 billion) were the top destinations for Asian outbound investment.
Asian investors are looking for ways to gain size, and portfolio or entity-level transactions are a good way to do so. In the first half of 2016, the number of portfolio transactions rose to 36%, up from 29% in the first half of 2015. In the first half of 2016, outbound transactions worth more than $500 million accounted for 45 percent of total value. The favored sector is offices, which receives 47 percent of investment, followed by hotels, which receive 33 percent. Asian investors are increasingly interested in establishing joint ventures and alliances with local developers or operators to invest in new markets and niche sectors. More investors are interested in buying real estate company stock to gain indirect exposure to non-gateway cities and investing in long-term build-to-core ventures.
"Over the last ten years, the Asian insurance industry has experienced tremendous growth. Real estate is only a relatively small portion of insurers' portfolios. In the face of low or negative interest rates on government bonds and volatile stock markets, these investors will continue to raise their allocations to global real estate to diversify their portfolios and improve returns. Since most Japanese institutional investors have little to no real estate holdings, they could become a new source of capital in the coming years. Property companies, especially those based in China and Singapore, will continue to look for opportunities abroad to mitigate the risk of a downturn in their home markets "CBRE's Global President of Capital Markets, Chris Ludeman, said.
After the Global Financial Crisis, Asian capital has been slowly growing its desire to invest outside of domestic markets. Due to structural and cyclical shifts, Asian capital has become more involved in global real estate markets over the last three years, led by investors from Singapore, China, South Korea, and Hong Kong.
In recent years, insurance firms have been a significant growth engine of global real estate investment. Since 2012, China, Taiwan, and South Korea have eased insurance regulations, allowing foreign real estate investment, increasing maximum real estate allocations, and streamlining approvals. The most involved outbound investors have been Chinese insurers, followed by Taiwanese and South Korean firms. The total amount invested in the first half of 2016 was $8 billion, which was more than the previous three years' total. This was mostly due to a significant hotel portfolio sale in the United States. Other notable transactions include China Life's purchase of the Paine Webber Building in New York for $550 million and China's Anbang Insurance Group's purchase of the Bentall Centre Tower in Vancouver for $769 million.
"Investing outside of Asia allows insurers to buy core assets with long lease periods, which are hard to come by in Asia, and to diversify their investment portfolios geographically. Asian institutional investors, especially insurance companies, continue to have low real estate allocations. In recent years, this has translated into increased outbound investment activity in global real estate "CBRE's Executive Director of Capital Markets, Marc Giuffrida, said.
In recent years, Asia has experienced a rapid increase in private wealth, a development that has fueled an increase in the number of High-Net-Worth Individuals (HNWIs). Though Japan continues to have the highest number of HNWIs in Asia, other markets such as China and India have emerged as wealth generators. The rise in wealth accumulation has prompted investors to seek out products from various financial intermediaries, especially in the face of low deposit interest rates. The potential of real estate to provide an inflation hedge and attractive returns has aided financial intermediaries' increased weighting of direct real estate in their portfolios.
Strong demand for real estate in Asia has pushed asset prices higher and yields lower than they've ever been. When comparing the yield spread between real estate and government bonds, it's clear that overseas markets still outperform Asia. Higher yield spreads, better yields, and the availability of longer lease covenants, especially for office assets, have kept long-term Asian investors interested in Europe and North America.