Publications

- February 1, 2018: Vol. 10, Number 2

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Multicurrency landscape: How did real estate returns fare for cross-border investors in 2017?

by Dr Megan Walters and Myles Huang

Currency movements are important for investors diversifying into foreign real estate markets. Given the multicurrency landscape, panregional real estate investment vehicles in Asia Pacific often carry a higher degree of currency-volatility risk compared with its peers in the euro zone and United States. As a result, some cross-border investors may choose to hedge their investments. In reality, hedging currency risk can be costly, depending on the market of investment and base currency, and the degree to which investors hedge — partial or full, overlaying at group level, hedging nominal equity capital or income stream. Other investors choose not to hedge because the strength of a foreign currency can sometimes contribute to the attractiveness of overseas real estate investment.

This is the third year we have analysed real estate returns by investor currency. As in previous years, we covered currencies for investors from the United States, Europe, the United Kingdom and five

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