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PETALING JAYA: South Korean investors are holding a positive view of the unlisted real estate market in the Asia Pacific and intend to increase their investments in the region over the next five years, according to a survey of the Asian Association for Investors in Non-listed Real Estate Vehicles Limited (ANREV) Korea Conference 2017 attendees.
Entitled “Smart real estate investing — Opportunities in a volatile world?”, the annual event is organised by ANREV — a non-profit-organisation driven by institutional investors in Asian unlisted property funds.
The conference brought together local and international investors, industry players and global opinion leaders to provide an outlook for South Korean institutional investors who are active in domestic and global real estate at a time of intensifying global political and economic uncertainty.
According to a press release today, the participants of the conference have a positive view of the logistics sector in Seoul, with a five-year holding presenting the most attractive investment opportunity in South Korea.
Beyond South Korea, delegates were evenly split on their top choices for investment in Asia Pacific real estate between Tokyo (pictured) and Sydney.
On a global scale, the participants expected to deploy capital fairly evenly between Asia (35%), the US (32%) and Europe (29%) this year, and very few plan to invest in London (4%).
Demographics, rather than geopolitics and technology, is the primary consideration when investing in the region, with 43% of those polled believing that an aging population will have the largest impact as a structural trend, followed by 30% who believed e-commence will have a significant role.
ANREV’s chief executive Alan Dalgleish said the responses received from the conference’s participants show a growing sophistication among South Korean investors and their willingness to seek strong investment returns.
"The audience’s responses reflect our own research in terms of interest in funds, both geographically, and also regarding sector and strategy. It was very interesting to see such a strong interest in debt products, which one of our conference presenters pointed out can have an important diversifying effect from a portfolio standpoint,” said Dalgleish.
The survey conducted by the conference showed that 88% of the respondents plan to invest in real estate debt over the next 12 to 18 months and 60% have expressed interest in mezzanine loans.
Meanwhile, 50% of the delegates believed that higher interest rates will have the greatest potential impact on commercial real estate.
