The year of investing wisely
Savvy investors in the Asia Pacific are putting their money into real estate, but it’s not where you think
Savvy investors in the Asia Pacific are putting their money into real estate, but it’s not where you think
Experienced investors are adopting a ‘wait and see’ approach for the start of the year, a new report on investment intentions in the Asia Pacific region reveals.
The 2023 Asia Pacific Investor Intentions Survey released by global real estate and investment firm CBRE this week examined responses from more than 500 investors across the region.
It found that while the fundraising market remained ‘healthy’, many were taking a back seat as lower yields and the impacts of interest rate hikes played out.
Although industrial and logistic real estate assets proved to be the most popular options, there was growing interest in the residential sector for built-to-rent and multifamily properties. Multifamily properties are where there are several separate dwellings on the same site, such as duplexes, townhouses or apartments.
Weekend auction activity in Sydney last weekend bore out this trend, with fierce bidding for a block of four two-bedroom Art Deco units in Clovelly. Selling agent Theo Karangis of NG Farah said there was strong interest from families looking to buy the whole block on behalf of their children. It eventually went under the hammer for $5.05m.
The CBRE survey also revealed that properties in the healthcare sector are proving desirable in the Asia Pacific, overtaking data centres, although available stock remains low.
The outlook for 2023 remains positive, the report found, with investors keeping a close an eye distressed opportunities and price dislocations.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
China’s economic recovery isn’t gaining the momentum money managers are awaiting.
Data from China Beige Book show that the economic green shoots glimpsed in August didn’t sprout further in September. Job growth and consumer spending faltered, while orders for exports came in at the lowest level since March, according to a monthly flash survey of more than 1,300 companies the independent research firm released Thursday evening.
Consumers’ initial revenge spending after Covid restrictions eased could be waning, the results indicate, with the biggest pullbacks in food and luxury items. While travel remains a bright spot ahead of the country’s Mid-Autumn Festival, hospitality firms and chain restaurants saw a sharp decline in sales, according to the survey.
And although policy makers have shown their willingness to stabilise the property market, the data showed another month of slower sales and lower prices in both the residential and commercial sectors.
Even more troubling are the continued problems at Evergrande Group, which has scuttled a plan to restructure itself, raising the risk of a liquidation that could further destabilise the property market and hit confidence about the economy. The embattled developer said it was notified that the company’s chairman Hui Ka Yan, who is under police watch, is suspected of committing criminal offences.
Nicole Kornitzer, who manages the $750 million Buffalo International Fund (ticker: BUIIX), worries about a “recession of expectations” as confidence continues to take a hit, discouraging people and businesses from spending. Kornitzer has only a fraction of the fund’s assets in China at the moment.
Before allocating more to China, Kornitzer said, she needs to see at least a couple quarters of improvement in spending, with consumption broadening beyond travel and dining out. Signs of stabilisation in the housing market would be encouraging as well, she said.
She isn’t alone in her concern about spending. Vivian Lin Thurston, manager for William Blair’s emerging markets and China strategies, said confidence among both consumers and small- and medium-enterprises is still suffering.
“Everyone is still out and about but they don’t buy as much or buy lower-priced goods so retail sales aren’t recovering as strongly and lower-income consumers are still under pressure because their employment and income aren’t back to pre-COVID levels,” said Thurston, who just returned from a visit to China.
“A lot of small- and medium- enterprises are struggling to stay afloat and are definitely taking a wait-and-see approach on whether they can expand. A lot went out of business during Covid and aren’t back yet. So far the stimulus measures have been anemic.”
Beijing needs to do more, especially to stabilise the property sector, Thurston said. The view on the ground is that more help could come in the fourth quarter—or once the Federal Reserve is done raising rates.
The fact that the Fed is raising rates while Beijing is cutting them is already putting pressure on the renminbi. If policy makers in China wait until the Fed is done, that would alleviate one source of pressure before their fiscal stimulus adds its own.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual