Emerging Trends in Real Estate

Given the size of their reserves and the extent to which they remain underallocated to real estate, Asian capital This year’s Investment Prospects survey shows a strong shift will continue to migrate abroad in coming years in quanti- away from last year’s favorites, which featured core markets in ties that will be large enough to change the dynamics of real Japan and Australia, in favor of emergin [...] According to investors interviewed for this report, the main change in 2016 has been a fall in the overall number of trans- Transactions Sink actions, together with an increase in big-ticket purchases, generally at the behest of deep-pocketed institutional buyers, Logically, the currently high demand for assets should lead and often in the form of platform or club deals. [...] As the only major market in Asia cur- Emerging Trends in Real Estate® Asia Pacific 2017 9 China: Key Themes China continues to be something of an enigma in invest- As a result, residential markets in first-tier cities have ment terms, with a multitude of cross currents muddying soared to dizzying heights, land values have gone through the waters for foreign investors looking in from the the roof, [...] Ongoing themes of developer consolidation; an natural target for diversification, and in part because the overall lack of experience in project planning and asset emergence of Chinese insurance companies and other management; and volatility in asset pricing, the economy, big domestic players has transformed the city into “a true and availability of capital all serve to create gaps in the instituti [...] In addition, owners of buildings in CBDs see little upside to selling assets in the current environment in the The migration to the suburbs is also consistent with the absence of a pressing need to liquidate (such as fund expira- increasing use of development models featuring mixed- tion).