Asia Pacific investors look to home amid policy uncertainties in US, Europe

PETALING JAYA (May 31): The Asia-Pacific region is expected to benefit from the policy uncertainties in the US and Europe in recent times.

Asia Pacific investors may be more comfortable about repatriating their investments back to their home region, said CBRE|WTW in a press release recently.

According to the property consultancy firm’s APAC Investor Intentions Survey 2017, investors polled showed stronger interest in developed and emerging Asian markets although they identified North America as their preferred destination for the second straight year in 2017.

The survey was carried out between Dec 8 last year and Jan 25 this year. A total of 504 responses were received from funds or asset managers, private equity firms, developers, listed property companies, unlisted real estate investment trusts, sovereign wealth funds, insurance funds and pension funds.

“Policy uncertainty in the US and Europe will prompt Asia Pacific investors to focus on their own region as these are markets and dynamics which they are familiar with. This is consistent with the increase in outbound investments within Asia recorded in 2016,” said CBRE/WTW.

Among emerging Asian markets, Vietnam registered increasing interest from South Korea, Japan and China investors. The significant interest in Vietnam is attributable to the country’s strong macro fundamentals and higher initial yields.

“The survey also indicated that the Asia-Pacific region and some Asean countries are gauging interests as an investment destination among international investors as well as home investors. Emerging markets in Asean in particular, are offering assets at lower prices with potential for growth in the future,” said the consultancy.

Malaysia could also stand to benefit from the renewed interest in Asia as strong government commitment in mega developments (such as public transport) and the cheaper Ringgit should favour investment activities in the country.

CBRE|WTW noted that the office sector is a market worth exploring in Malaysia as the potential drop in prices in office spaces will present a good opportunity for investors to acquire an office property whether for self-occupation or tenancy.

“While challenges could arise from lower rents due to abundant supply, recovery in oil prices could be the tell-tale sign of an improvement in the overall business environment which would then lead to a reverse flow of office occupiers into the Kuala Lumpur city centre.”