Saturday, April 17, 2010

Asia property investors see recovery by Q4

Most say domestic market is at or near bottom, survey of 244 major institutional and private global investors shows

REAL estate investors in Asia think that their domestic markets are already at or near the bottom of the property clock and they expect the region’s markets to recover by the fourth quarter of this year, findings of a new survey show.

Meanwhile, investors in Canada, Latin America and Eastern and Western Europe expect recovery by Q1 2011, and those in the United States in Q2 2011, the survey by real estate firm Colliers International found.

The survey, conducted between February 2010 and March 2010, compiled views from 244 major institutional and private global investors with a combined portfolio exceeding US$300 billion.

It referred to a ‘global property clock’ which equates the market cycle to specific times – 12 o’clock represents the peak of the market and six o’clock represents the bottom. Each six-hour period symbolises rising (from 6.00 to 12.00) and declining (from 12.00 to 6.00) cycles.

Findings revealed that most investors think their domestic market is at or near the bottom, with 41 per cent indicating the market is between 5.00 and 6.00 on the global property clock, while 19 per cent feel their market has already moved from the bottom and is now sitting at 8.00.

Asia was viewed to be at the market’s bottom (6.00).

‘Investors worldwide clearly see the market re-setting in general and about to enter the next up-cycle,’ said Piers Brunner, Colliers’ chief executive for Asia.

The survey also revealed that two out of three respondents are looking to expand their real estate portfolios in the next 12 months – indicating the investors have developed much more confidence in the market.

But a majority of them are still cautious and have expressed a higher comfort level in engaging in just domestic investments. Emerging markets such as Brazil, India, Poland, Ukraine and Vietnam were also singled out as countries for possible future investments.

Mr Brunner said: ‘The tendency to invest domestically is most likely a short-term phenomenon. Cross-border investments will take place once investors have a greater comfort level in the global economy and the global financial system.’

Other findings revealed that investors worldwide believe the availability and ease of getting finance for purchases is still a major concern, and that there is a shifting preference from properties with a ‘high risk’ profile towards high-quality and well-performing assets.

Source: Business Times, 17 Apr 2010

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