Between 2018 and 2022, Asia will host three consecutive Olympic Games. What real estate investment opportunities do the Olympics present, and what does this mean for Asia’s place in institutional property portfolios?
For those of us in the Asia Pacific real estate finance industry, 2018 has been unusual because geopolitics have been a dominating factor in generating performance. We believe Asia’s economic fundamentals are still stable, and the real estate sector should continue to perform in 2019. Trade friction and other geopolitical risks, however, will continue to dominate headlines in at least the early months of 2019, adding uncertainty to the region.
Chinese investment into US real estate has been significant in recent years, but it has declined since 2016, mainly due to Chinese government-issued capital controls. But even as Chinese investment in US real estate has seen a recent decline, overall cross-border investment in the United States continued to climb in second quarter 2018.
Over the past few years, Australia has benefited from a strong increase in foreign investment in the property market. Although a large portion of capital has come from China, other nations have more recently looked to Australia as an attractive investment proposition.
The Editorial Advisory Board of this publication met in Seoul in late October to discuss the industry’s most pressing concerns, which we compile from board members in advance in the form of “food for thought” topics.
Despite geopolitical uncertainty and a slowing in the economic cycle, investment in the global property market rose a significant 18 percent year on year to a new record high of US$1.8 trillion (2017: US$1.5 trillion), according to Cushman & Wakefield’s Winning in Growth Cities report.
Across the board, October stock performance — for broader equities and property stocks, both globally and in the Asia Pacific region — was dismal, as the story lines of US Federal Reserve tightening, trade war tensions and an ex-US global economic slowdown accelerated.