Hong Kong and Singapore investors most confident to invest among Asian peers

But overall intention to invest has moderated.

Findings from a study reveal that investor sentiment will remain positive in 2015 with the majority of investors (54%) planning to make more real estate purchases this year. This result suggests that investors retain a strong belief in long-term economic growth in the region and will continue to invest capital in Asia Pacific.

According to a release from CBRE, the intention to invest moderated from last year—in CBRE’s 2014 survey, 64% indicated the desire to make more real estate purchases—as investors continue to be concerned on high pricing; availability of investible stock and uncertainty over the economic outlook.

In particular, respondents identified a high level of asset pricing as the biggest obstacle to acquisitions (31%) and the greatest threat to the region (21%) for the second consecutive year. This concern is not without reason as the pace of price appreciation has slowed to 6% in 2014, compared to an average of 9% recorded over the past four years according to CBRE’s All-sector Capital Value Index.

Further, among Asian investors, buyers from Hong Kong and Singapore displayed the strongest intentions to invest. Over 62% of Hong Kong respondents indicated an increase of purchase in the year.

The trend of outbound investment is set to gather further momentum with 29% expressing an interest in doing so. “Demand from these investors is being supported by the sustained low interest rate environment in Hong Kong and also their interest in expanding their portfolios beyond their home market,” explained Ada Choi, Senior Director, CBRE Research Asia.

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“Our view is that investment liquidity will remain abundant in the regional real estate market but that deal flow will be limited by investment opportunities and pricing.

We thus expect only a mild increase in investment turnover in 2015, by around 3-5% year-on-year,” said Ada Choi, Senior Director, CBRE Research Asia.

Some mature markets have become more attractive investment destinations. Hong Kong, Singapore, New Zealand and South Korea moved up the rankings though major markets such as China, Japan and Australia, remained top investment destinations in the region.

This result aligns with the findings of the lower risk appetite among investors. Emerging markets such as India and Indonesia saw weaker interest as investors remain concerned over the pace of political and economic reform as well as the oversupply situation.