North America has long been the most popular destination for institutional investor capital, especially among American and Asian investors.
However, the progressive rise in U.S. interest rates – and the prospect of more to come – are deterring some investors from expanding rapidly in the country, prompting a potential reallocation of capital towards markets in Asia Pacific.
“Transaction volumes in the APAC region were up 20 percent year-on-year to Q3 2018, with full year volumes expected to set another record,” says Nick Wilson, Director of Asia Pacific Capital Markets Research. “The growth momentum will likely slow in 2019, but we still forecast an approximately 5 percent rise in overall transaction volumes.”
Hong Kong and Korea experienced the strongest growth in 2018, but signs of negative sentiment in Hong Kong suggest volumes will remain flat or decline through 2019, says Wilson.
Meanwhile, foreign investor interest in Korea continues to build, as a mixture of attractive funding costs and healthier relative yields attract income seeking investors.
Investment interest in Japan has picked up, reflecting the downside risk protection the country’s safe haven status offers. However, some investors have concerns around pricing in the market.
In Singapore, the pipeline is looking healthy for next year and a number of mega-deals are expected to support transaction volume growth. By contrast, China could go either way.
Source : https://www.theinvestor.jll/news/asia-pacific/others/investors-still-hungry-for-apac-real-estate-in-2019