Commercial real estate investment from Asian countries into the European region is expected to increase in the coming years, recent reports say.
According to ING, as reported by South China Morning Post, the uptrend seen last year in Asian investment is going to continue over the next few years. In 2015, investment in European commercial real estate market from Asian investors accounted for 6 percent, a 50 percent increase in Euro volume terms from a year earlier. Most ventures came from Malaysia, Singapore and Korea, as well as China and Taiwan. ING expects improved activities from Japan and Australia in the coming years.
SCMP noted that the boost in European investment can be largely attributed to the weakening Euro, low-interest rates, gradually improving macroeconomic conditions and increased liquidity of commercial property assets by globe investors. Stronger investment appetite among Asian investors, meanwhile, is triggered by more investment from non-bank financial institutions influenced by the easing of regulations on alternative investment in Europe.
ING also foresee a continued positive interest among Chinese investors despite the ongoing economy tumult and the depreciating yuan. What would drive this is the scarcity of core investment assets in the Asian region and the lower value of the euro, SMCP added.
Aside from China and Southeast Asian countries, South Africa and other emerging economies, as well as North America have been pouring money into Europe's property market, the Financial Times reported. The publication noted that from 2012 to 2015, the region received about €16.4 billion of investment from western Europe and North America. This is driven by some investors trying to diversify their portfolio by including more foreign investments. Getting more investment exposure in the European region has been possible with many programs eased by the U.S., the U.K. and other Eurozone central banks since 2008.
