Asia’s accelerating economic growth and rising industrial output and retail sales all point to a positive outlook for the region’s property markets during the coming year, according to Colliers International.
In its International Asia Real Estate Forecast 2014, the global real estate services company says it expects a tight supply and rising rentals in core city locations will encourage office and retail tenants to relocate to less-expensive decentralised areas.
“A striking feature in the market is likely to be a big increase in outbound capital investment by Asian investors,” says Simon Lo, Executive Director of Research & Advisory, Asia, at Colliers International.
“They will be seeking to exploit the big differences between the property cycles in Asia and the US and Europe in order to achieve better yields and enjoy the strategic benefits of diversification.”
Chinese investors are set to lead the way in this trend. They are likely to spend at least twice as much on overseas property assets as last year. Their favourite investment destinations will be gateway cities like London, New York and Chicago.
Taiwanese institutional investors will also be major players, following the recent relaxation of regulations concerning overseas investments by the authorities in those places. Meanwhile, Korea will be following suit to see more relaxed policy on acquisition of overseas real estate by Korean nationals.
In Hong Kong, a key trend of shifting from core to non-core locations is expected. This applies not only to office occupiers, which relocations to Kowloon East have seen, but also to retailers who continue to shift their focus from high streets to sub-urban locations.
Lo explained: “The growth in the luxury segment of Hong Kong’s retail market has decelerated, with the impact of China’s political reforms on anti-extravagance rules that deter China tourists’ purchase of luxury goods.
“Moreover, as the number of same-day visitor arrivals increases, the market has observed a change of spending pattern towards mid-priced products and daily necessities such as beauty and personal care products. These explain the growing demand in locations out of the traditional high streets that are mostly occupied by international brands and luxury retailers.”
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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