Tag Archives: Commercial Real Estate

Commercial property looking attractive for the world’s wealthy

Commercial real estate is one of the top two assets, along with equities, that wealthy individuals and their investment advisers are targeting for investment this year, according to a study published by property consultancy firm Knight Frank and Citi Private Bank.

The study showed that wealthy investors plan to allocate around one-fifth of their investment portfolios to commercial real estate and another 19 percent to equities this year.

The study surveyed around 40 investors and 70 investment advisers globally, with each of the investors possessing investible assets (excluding primary residences) valued at more than US$10 million.

Most investment advisers said they would suggest that one-fifth of investment portfolios be allocated to commercial property, with 11 and five percent going to commercial and residential properties respectively.

“Commercial property is a more established investment asset class compared to residential. There is more data available on asset performance, and therefore advisers in particular tend to prefer it,” said Liam Bailey, Head of Residential Research at Knight Frank.

“Property is a huge and important asset class. Most wealth advisers and their wealthy clients would look to have some exposure to this asset.”

Alvin Yip Kwok-ping, Co-head of Investment for DTZ China, said that Hong Kong and mainland China would also see investors choose commercial and residential properties this year.

“In Hong Kong, some buyers have been discouraged from investing in residential properties since the implementation of the special stamp duty last year,” said Mr. Yip.

“So relatively, they would be more interested in commercial property, although both of them are hitting their historic high prices now.”

The study also showed that Monaco remained the most expensive residential location globally, with average prices of luxury properties hitting US$65,600 psm. This was followed by London, where luxury properties are priced at US$56,300 psm.

With an average price of US$27,300 psf, Hong Kong is home to the second most expensive residential properties in Asia and ninth globally, behind Tokyo. In 2010, Hong Kong was the fourth most expensive city in the world.

Source : PropertyGuru – 13 Apr 2011

Asia-Pacific commercial property investments up

Commercial real-estate investment volumes in the Asia-Pacific increased by 8 per cent in the third quarter of this year to US$29.6 billion ($38.4 billion), according to DTZ Research.

The real-estate research house said that volume growth would remain strong for the remainder of this year – and into next year, with investment predicted to hit US$145 billion next year. That would be a 12-per-cent increase on the expected volume of US$129 billion for the whole of this year.

The established markets of Australia and Hong Kong both recorded 40 per cent jumps in third quarter investment – to US$4.3 billion and US$1.7 billion, respectively.

Volumes in Japan also increased 25 per cent quarter-on-quarter to US$4.7 billion.

Meanwhile, investment volumes in Malaysia reached a record high of US$1.9 billion in the third quarter, representing a 233-per-cent improvement from the second quarter. The growth was led by large acquisitions of retail property assets by domestic real estate investment trusts.

In Singapore, volumes surpassed the US$3 billion mark last seen in 2008 as the world’s fastest-growing economy boosted investor confidence.

The Chinese market, however, registered a 21-per-cent decline from the previous three months to US$11.9 billion because of the steps taken by Beijing to curb property market excesses in the country.

However, China still remains the most liquid market in the Asia-Pacific region, accounting for 40 per cent of overall activity in the third quarter.

Mr David Green-Morgan, head of DTZ Asia Pacific Research, is optimistic about the outlook for Asia-Pacific property investments, with capital and rental values predicted to increase across almost all markets next year.

He said he expected institutional investors, especially sovereign wealth funds and pension funds, to become increasingly active in the region’s property markets.

Source : Today – 22 Oct 2010