By Rob Starr, Content Manager, Big4.com
Australia has dominated investment flows in Asian real estate despite Sydney and Melbourne both slipping in the top 10 Asia Pacific real estate investment prospects for 2013, according to PwC and the Urban Land Institute.
According to Emerging Trends in Real Estate Asia Pacific 2013, if you strip out Hong Kong money going into China and vice versa and a big logistics deal in Japan, Australia absorbed more international real estate investment than any other market in the region thanks to its exposure to China, high-quality stock, continued economic growth and high yields.
The top 10 city investment markets for 2013 also include Shanghai, Singapore, Kuala Lumpur, Bangkok, Beijing, China’s secondary cities and Taipei.
For the Asia Pacific as a whole, steady economic growth, rising incomes, and stable or increasing property values are contributing to an overall sense of optimism. However, this is tempered by growing concerns among investors that prime assets in key real estate markets are becoming overpriced. For instance, capitalisation rates across Asia remain more compressed than in many western markets, and yields for core office stock in cities such as Beijing, Hong Kong and Singapore are returning as little as two percent.