In today’s unsettled global marketplace, investors are seeking refuge and opportunity in cross-border real estate investments. For Asia Pacific investors, the troubled markets of Europe and the United States keep beckoning. Longtime investors from Japan and Singapore are being joined by newcomers from Malaysia, Hong Kong, South Korea and elsewhere. Asia Pacific institutional investment in the United States has increased recently, as has intra-regional Asia Pacific investments. But apart from the United Kingdom, Western Europe has been giving investors a case of the jitters, and investment there slowed in 2011. What challenges and potential rewards do Asian investors face when going cross-border?
From the Current Issue
The Chinese government has been steadily applying measures to cool China’s property markets, ranging from instructing banks to curtail lending to property market participants, to introducing pilot property taxes in several cities, etc. Although headlines can be quite confusing, it appears these measures have started bringing about results and the prices in many cities have either stopped rising or decreased. Deal volume went down, too.
Before filing the pitch books away, I again flipped through about 20 to 25 of them. I quickly realized that they all looked an awful lot alike, that it was truly difficult to differentiate one presentation from another. They all blended together after an hour or two of reading.
Cross-border investment in real estate raises the question of movements between the currency of the country in which the real estate assets are located and the home currency of the investor. Should investors hedge, or is the strength of the currency in a foreign location all part of the attractiveness of overseas real estate investment?