Inbound real estate investments in key Asian cities set to double in 2015, says Colliers

By hockmeng.tay@bizedge.com
Asia is expected to see a rising tide of both outbound and inbound real estate capital flows in 2015I, according to a white report by Colliers International. The outbound real estate investment flows in Asia are set to increase 61% from US$46 billion in 2014, while inbound capital flow is forecast to increase by 102% from US$13.2 billion in 2014. “Capital is shifting back to Asia, as we witness yield compression in most key US and UK markets, as well as yield improvements in some Asia markets with more realistically-priced assets surfacing,” says Terrance Tang, Colliers’ managing director of capital markets and investment services for Asia.
Colliers recommends the luxury, high-end residential sector in Singapore as one of the sources of potential investment opportunities, owing to continuously falling transaction volumes and the build- up in inventory. The price gap between buyers and sellers is also narrowing, according to the property consultancy. Given the correction in the overall local high-end residential markets, the asset class may begin to look attractive to long-term investors. The office sector in Singapore is also compel- ling, with high occupancy and increasing rent rates. However, with an impending supply growth starting in 2017, investors’ interest may slightly soften towards the end of the year.
Colliers expects Singapore investors to continue seeking high-yielding real estate investments across key markets around the world in 2015 and 2016 owing to lack of domestic real estate investment opportunities. Key gateway cities including London, New York, Sydney and Melbourne remained the preferred destinations, followed by Munich, Cologne, Barcelona and Milan.
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