As many economies continue to raise interest rates to tackle inflation, and with growing concerns of a recession in other parts of the world, Asia Pacific investors have become more cautious, with net buying intention softening in 2023.
The 2023 Asia Pacific Investor Intentions Survey, which features insights from more than 500 investors across the region, finds that although fundraising activity remains healthy, most investors intend to adopt a wait-and-see stance in the first half of 2023 in anticipation of slower yield expansion and milder rate hikes.
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Other key findings include:
- Real estate allocations among Asia-based institutional investors are largely below their global peers. These respondents indicate that their allocations to real estate will remain the same or increase over the next 12 months.
- Opportunistic strategies will gain momentum in 2023 as investors look to capitalise on price dislocation and seek distressed opportunities.
- Industrial and logistics remains the most preferred asset class, while residential (especially multifamily and built-to-rent) logged the strongest uptick in interest. Offices are still the top property type among core investors.
- Although healthcare-related properties have overtaken data centres to become the most popular alternative sector, the investible universe for this asset class in Asia Pacific remains limited.
- Tokyo retained its status as the top city for cross-border investment for a fourth consecutive year, followed by Singapore. Ho Chi Minh City ranked in the top three for the first time, while Hong Kong SAR returned to the top five after a four-year absence.
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