Asian buyers are now the biggest cross-border buyers within Asia Pacific. They accounted for 8 out of the 10 largest deals brokered by JLL in 2015 and 51 percent of all cross border buyer activity in 2015, amounting to about USD 18.3 billion. China has been the largest cross border buyer within the region with transaction volumes amounting to $6.7 billion in 2015, followed by Singapore at $4.6 billion and Hong Kong at $4.5 billion.
The growth of Chinese outbound capital continues unabated despite the economic outlook and stock market volatility, and appears to be a part of a long term structural shift. Chinese insurance companies such as China Life and Ping An, are re-balancing their portfolios including allocations to international real estate in line with their global peers.
Some prominent examples of Asian buyer activity within the region include China Investment Corporation’s purchase of the Investa office portfolio in Australia in Q3 (USD 1.8 billion), Hong Kong’s LINK REIT buying Corporate Avenue 1&2 in Shanghai in Q3 (USD 1.0 billion) and Singapore’s Ascendas buying the GIC logistics portfolio in Australia in Q3 (USD 778 million).
However, when it comes to larger deals over $200 million, Asian buyers are less active and buyers from the Americas and global sources take the front seat. In 2015, Asian buyers accounted for 44 percent of all cross border buyer activity in 2015 above the $200 million mark, amounting to about USD 11.3 billion.
We anticipate this emerging trend to continue in 2016 as investors look to gain access to stock that is difficult to acquire directly and covers multiple locations. We expect more big deals to come to the market due to strong interest shown by cross-border Asian investors and global funds. The opportunity to acquire high quality retail assets should arise in China and Japan’s regional cities and prime CBD office assets are on the market in Singapore and likely to be in Hong Kong too. Furthermore, volatility in the equity markets may create opportunities for public to private transfers.
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