May 27, 2019

Asia Pacific property news: yield spreads are top focus

Asia Pacific property news

In recent Asia Pacific property news, it is said that investors involved in Asia Pacific real estate are very focused on yield spreads this year, when looking to obtain assets through their investments.

Not only that but investors are now seeking to shift away from capital appreciation strategies, taking a different approach altogether towards the Asia Pacific real estate market.

CBRE Research shows that the search for yield is instigating investors to direct their capital toward more mature real estate industries, such as those in Japan and Australia. However, the same investors are planning to divert from the more traditional markets like Tokyo, Melbourne and Sydney, which shows that investment strategies are widely diversifying.

A Director at CBRE said: “The investment landscape for Asia Pacific real estate has transformed significantly in the past decade.

“A mix of new entrants, the emergence of first-time cross-border investors and the wider involvement of institutional investors, have not only spiked capital volumes but also changed the dynamic of this market substantially.”

More findings have shown that the quest for yield can be connected to a bigger participation of institutional investors. These include a variety of insurance companies, pension funds and sovereign wealth funds (SWFs), all of which invested a mighty US$22.5 billion into the Asia Pacific real estate market between 2013 and 2016.

This Asia Pacific property news comes as a big surprise for a lot of buyers, sellers and investors in the worldwide property industry, but it is having a domino effect on decision-making. The more that this property news becomes widespread, the more it is influencing and encouraging others to take a look into the Asia Pacific real estate market; it gets others wondering what the fuss is about.

The big quest for yield is certainly moving the investor interest towards Australian real estate assets throughout 2017. Despite the want to shift interest from traditional markets, Sydney and Melbourne still remain as attractive spots for investors who are looking for investments with high yield spreads.

Some reasons for this soaring popularity around Sydney and Melbourne include robust liquidity, market transparency and solid foundations.

These two cities are undoubtedly the most consistently sought-after investment industries in the Asia Pacific right now.

Written by Gemma Smith

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