Asian real estate investors are venturing beyond regional markets to OECD countries and other areas in the West, according to a recent study by Colliers International.
Outbound real estate investment from Asia has climbed from $1 billion in the early 2000’s to more than $30 billion in 2013. This is a result of a surge in global liquidity, as well as several other “pull” and “push” factors, according to CEO, Asia at Colliers International Piers Brunner.
Pull factors include the higher yields available in foreign markets, as well as strong economic growth potential and first world country real estate environments. Meanwhile, governments in Mainland China, Hong Kong and Singapore are pushing investors in an effort to slow local real estate markets by loosening overseas investment restrictions.
According to John Marasco, Colliers International’s Managing Director of Capital Markets and Investment Services in Australia, the Chinese investors are contributing greatly to the Australian real estate market.
“Chinese buyers alone are currently spending around $5.9 billion a year on Australian property (both residential and commercial),” he said. “The strong performance of Australia’s property markets suggest this demand will continue to grow across a range of assets.”
Director of Capital Markets and Investment Services, Asia, Terence Tang added: “We believe the emerging trend will see more outbound investors taking on additional risks in non-traditional property sectors, such as hotels, and to commit to value-adding schemes, including conversion and development opportunities, in the secondary locations of gateway cities, where prices are more attractive than in traditional core locations.”
Southeast Asia has been upping its investment into New Zealand, with an FDI that grew to 4.4 billion NZ dollars, up from 2.8 billion last year.
According to Statistics New Zealand, this growth is mainly a result of FDI from Singapore.
Jason Attewell, balance of payments manager, explained: “In the latest year, Singapore replaced Japan as the fourth-largest inward investor to New Zealand.”
Still, Australia remains the country with the greatest direct investment in New Zealand. With stocks valued at 63.3 billion NZ dollars, Australia is followed by the United States and Britain. New Zealand’s outward direct investment has been decreasing, however.
“Over the last five years, the value of New Zealand’s portfolio investment has increased by almost a third, whereas direct investment into overseas subsidiaries still sits at a very similar level,” Attewell said.
New Zealand’s total investment abroad is largely put into Australia, with stocks of 48.2 billion NZ dollars.
AudienceScience, a digital marketing technology company, is expanding its investment in Asia Pacific with a new data center in Hong Kong and two new offices in Hong Kong and Singapore. The company also has a presence in Tokyo.
AudienceScience’s Mark Connolly said: “AudienceScience has been in APAC since 2010 and has seen significant evolution in the digital advertising market. RTB is currently missing in APAC, but AudeinceScience clients are the most advanced in the region and continue to lead the adoption of more efficient and effective buying methods. With our recent technology investments, AudienceScience is positioned to continue providing industry-leading technology to its APAC clients.”
AudienceSciende CEO Like Peralta added: “APAC is a critical market for our clients and for AudienceScience. With more advertisers recognizing the value and importance of APAC, AudienceScience is dedicated to providing technology on par with that available to European and North American advertisers. We will continue to invest in the technology and staff needed to ensure that our clients receive world-class product and services across the globe.”
A number of major global investment firms are choosing emerging markets in an effort to recover from the latest financial slump. Mirae Asset Global, a firm with $58 billion under management, explained that emerging economies are the hub of global output. The leading market is China, they added.
“We are positive on equities for 2013, although not outrightly bullish,” Mirae analysts wrote in a client report last week. “We believe that the earnings downgrade cycle has ended… and that economic recovery will be slower than in previous cycles as the economies of China and India work to correct their imbalances and are restricted in their ability to pump prime growth.”
The report added, “We are identifying pockets of overvaluation in consumer sectors, and now favor early-cycle consumer discretionary and financials over staples. Industrials and health care stand out as combining structural growth, government support and reasonable valuation.”