JAPANESE offices and Chinese residential properties are this year's top two picks for global real estate investors, according to a recently released pilot survey conducted by the European and Asian industry bodies INREV and AREA.
INREV and AREA refer to the European Association for Investors in Non-listed Real Estate Vehicles and Asian Real Estate Association.
"Real estate investors, in particular non-listed real estate funds, are increasingly planning to raise their exposure in Asia as it is the market of the future, given the diverse range of opportunities they see in the market,'' said Nick Loup, co-director of AREA and managing director of Grosvenor Asia Pacific. "Japan is clearly one of the more established markets with institutional quality stock, while China is a developing market with a private housing sector that has been growing rapidly.''
Grosvenor, a privately-owned group of international property development, investment and fund management businesses, said in April it plans to grow its assets portfolio in the Asia-Pacific region to US$2 billion by the end of this year from about US$1.4 billion in 2007. It plans to expand further to US$5 billion in the next five years, out of which 50 percent will be in China.
The INREV/AREA Investment Intentions Asia Survey was based on 65 responses including 30 fund managers, 21 institutional investors and 14 fund managers. Europe has the largest number of respondents with 71 percent while 17 percent were in the United States and 12 percent were in Asia.
Investors responding to the survey are mainly focused on non-listed funds, which have accounted for about 85 percent of their holdings in Asia, with access to expert management being the primary reason for investing in these funds, INREV Chief Executive Lisette van Doorn said.
By investment types, 40 percent of investors indicated a strong preference for core funds, with the remainder split evenly between value-added and opportunity funds.
In Shanghai, investment in luxury residential properties remained active in the first quarter, with total amount exceeding 4.1 billion yuan (US$590 million), according to property services provider DTZ.