Publications

- September 1, 2019: Vol. 31, Number 8

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Currency risk: How are cross-border real estate investors faring in 2019?

by Megan Walters and Myles Huang

Commercial real estate markets in Asia Pacific delivered strong total returns for investors in recent years. Average annual returns in 10 major Asia Pacific office markets ranged between 5 percent and 20 percent per year during 2016–2018, as compared with low single-digit returns in New York City and London. JLL expects Asia Pacific real estate to remain attractive to international investors and total returns in most markets to remain relatively steady in the next three years.

Nevertheless, currency movements are also an important consideration for interregional investors diversifying into Asia Pacific real estate markets. It is clear that currencies are volatile and unpredictable, and this foreign exchange rate risk brings additional uncertainty to international investment returns. Given the multicurrency landscape, pan-regional real estate investment vehicles in Asia Pacific often carry a higher degree of currency volatility risk compared to peers in the euro zone and Uni

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