While rising cross-border capital flows and a high volume of undeployed funds are reasons to be positive in the near term, many real estate markets in the region face similar headwinds as US trade relations deteriorate while debt burdened economies keep a wary eye on interest rates which remain low by historical standards.
Simon Smith, Savills Research
Australia
In Australia, investment returns across the office and industrial sectors remain above historical averages.
China
As the Chinese government encourages financial institutions to correctly classify and eventually offload their NPLs, which are often secured against real estate assets, AMCs and NPL investors remain keen to snap up new portfolios.
Hong Kong
In Hong Kong, despite an active commercial investment market, the city is braced for the negative impact of a failure to resolve the US/China trade dispute.
Japan
Although business sentiment in Japan has cooled somewhat, the economy returned to growth in Q4/2018 and the yield gap remains wide, making real estate an attractive option for investors.
Malaysia
There has been a pick-up in domestic institutional activity in Malaysia, which we anticipate will continue over the coming quarters as they look to rebalance their portfolios.
New Zealand
Foreign investor activity is on the rise, with New Zealand firmly on the radar as a global investment destination.
Singapore
Although economic growth in Singapore this year could slow, major investment deals are still being inked.
Korea
In Korea, cheap borrowing costs ensured the continuing vitality of the market over the first quarter of the year.
Taiwan
In Taiwan, local developers eager to expand their land banks lead to the highest quarterly volume of land sales in nine years.
Thailand
Growing interest in Thailand’s industrial sector, coupled with clarity surrounding key infrastructure projects, drove first quarter investment, with large-scale transactions taking place across Greater Bangkok and the eastern seaboard.
Vietnam
In Vietnam, a strong domestic economy combined with rising FDI into a wider range of industries and locations pushed values higher.