September 25, 2013

The Asia Pacific region continues to outperform the rest of the world economically, with wealth being created at a remarkably rapid rate. There are currently more than 332 billionaires in Asia, a massive 177% increase from 120 in 2009. China is leading the pack, moving from 35th to 2nd position between 2005 and 2010. As a result, we have seen an increased prominence of Asian private investors in the global real estate landscape. Asian high net-worth individuals (HNWI) are becoming increasingly investment savvy, often choosing to invest in real estate assets outside of their home country. Their preferences have been diverse, ranging from prime trophy commercial buildings to hotel and residential developments.

There are a number of drivers behind investment appetite, including diversification, currency, wealth preservation and the attractive relative value of international opportunities. However, there is a growing breed of Asian investors that are driven by more emotional drivers such as the familiarity with certain cities through familial ties and educational affiliations. Asian HNW families are increasingly looking to secure an overseas education for their children. This, coupled with the desire to become a fashionable global citizen, presents a compelling case for them to invest in properties in the cities where their children attend university. The potent mix of education and property is arguably playing a bigger role in dictating the flow of global capital into real estate investments. Jones Lang LaSalle has identified ten cities that demonstrate this trend; offering both a high concentration of international students and significant volumes of direct commercial real estate investment.

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