ALTERNATIVE INVESTMENT | Staff Reporter, Singapore

6 in 10 Asian investors expect property market to improve by next year

But they are treading cautiously.

Asian investors are more confident about investing in properties, boosting optimism over the outlook for the region, according to preliminary data released by Colliers International Global Investor Sentiment Survey.

A majority of the respondents (62 per cent) believes that property markets across Asia will improve over the next 12 months, reflecting a higher level of confidence than last year when only 38 per cent of Asia respondents expects improvement in the year ahead.

Mr Simon Lo, Executive Director of Research & Advisory, Asia says, “The survey findings reveal that when Asian property investors make their investment decisions, the most important factor they consider is the economic growth of a region, followed by property fundamentals and sovereign/political risk.”

The survey also indicated that, despite a somewhat-restored confidence, investors are still treading cautiously in the face of possible tightening of the stimulus programme in the U.S. and the slower-than-expected economic growth in Asia.

The survey indicated that almost half (48 per cent) of the Asian respondents targeted internal rate of returns (IRRs) at 15-20 per cent, while another significant portion (32 per cent) of the respondents targeted IRRs of over 20 per cent.

Mr Terence Tang, Managing Director of Capital Markets & Investment Services | Asia at Colliers International says, “In anticipation of an interest hike and increased worries of the U.S. Federal Reserve’s tapering of their Quantitative Easing (QE3) measures, Asian investors have priced greater risk premiums into their search for returns.”

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