Australia remains popular as a destination for global real estate investors, according to the Emerging Trends in Real Estate Asia Pacific 2017 report, which is jointly published by the Urban Land Institute and PwC.
Australia’s mature market and relatively high yields continue to attract institutional investors, however the number of transactions fell in 2016 due to an acute shortage of investable assets, according to the report.
Large amounts of foreign capital continue to arrive in Australia, but in 2015 domestic purchases were the largest component of investment-grade acquisitions, showing the huge weight of capital being invested in Australia from domestic pension funds.
“The numbers of investors that are looking for opportunities vastly outweighs the prospects available because the amount of institutional-quality real estate is small,” said John Carfi, ULI Australia Chairman and Head of Residential, Mirvac.
This year’s Investment Prospects survey shows a strong shift away from last year’s favorites, which featured Sydney and Melbourne, in favor of emerging-market destinations.
The top five markets for investment and development in 2017 are Bangalore, Mumbai, Manila, Ho Chi Minh City, and Shenzhen.
Other findings from the report include a desire for higher returns, investments in metropolitan areas given the trends towards urbanization, and Asia's embracing of the shared economy, with shared office and residential spaces becoming popular.
Emerging Trends provides an outlook on Asia Pacific real estate investment and development trends, real estate finance and capital markets, and trends by property sector and metropolitan area. It is based on the opinions of 604 internationally renowned real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants.
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