Data released from real estate firm CBRE revealed that in 2018 there has been a shift in real estate investment in the region. A result of Chinese investors moving their portfolios is a representation of rebalancing and strategically preparation for future activity.
The pullback from China’s investors was not entirely unexpected but encouragingly created opportunities for new strategic investors to amplify offshore investment activities, according to Leo Chung, Associate Director, Research, Asia Pacific CBRE.
Throughout 2018, there was a total of THB 1.72 trillion in the capital that was allocated into offshore real estate, this represents a staggering 36 percent decline year-on-year. While this shift was expected as Chinese investors have been actively reworking their portfolios to prepare for future business and to make balance sheets more attractive, this decrease has aided overseas real estate investment to reach THB 239.1 billion in 2018. With a particular focus on Europe accounting for THB 685.4 billion in the capital. Intra-Asian followed next with THB 542 billion, then the Americas and the Pacific Region.
It is not only the Chinese, as investors from India and Malaysia have made their mark increasing their spending overseas too. Singaporean and Korean investors have also been active players too. The tiny islands state of Singapore has hiked up their investment from THB 663.3 billion in 2017 to THB 686.6 billion the following year. Korea has been following a similar pattern allocating THB 200.8 billion in 2017 and THB 232.7 billion in 2018.
London continues to draw in the most amount of investment thanks to its stable and robust economy, enticing in particular investors from Hong Kong, Singapore, and Korea who make up 85 percent of London bound investors.
“Asia-based investors remain hungry for offshore acquisitions but will employ a more selective strategy in their overseas purchase activities. The hedging costs into certain countries are also impacting investment flows for many outbound Asian investors,” said Tom Moffat, Head of Capital Markets, Asia, CBRE.