Investors to stay focused on Asia
The massive flow of funds into the Asia-Pacific region will continue this year as investors balance caution with risk, according to CB Richard Ellis Asia Pacific chairman Rob Blain.
Funds traditionally targeted at markets in North America and Europe had been directed to the Asia Pacific in the past few years, thanks to the improved investment environment in region, he said.
'Investment is always an arbitrage between capital costs and total returns. Asia is now competitive with global markets.'
He said returns on capital in Asia had improved while margins in North America and Europe had tightened. There was an overweight of capital from America and Europe targeted at Japan while investors watched 'what is happening in Greater China'.
Asian investors from Singapore, Hong Kong and the mainland were also looking at investment opportunities in Asian countries, he said.
Hongkong Land was eyeing Greater China and Southeast Asia, while Cheung Kong, a global investor, was watching Singapore and the mainland. Sun Hung Kai Properties is interested in Singapore's retail market.
Mr Blain said CBRE would expand operations in the Asia-Pacific region this year, adding another four or five offices to the six in Greater China, and increase its presence in India to eight or 10 offices from six.
CBRE became the biggest international property brokerage in Japan last month when it increased its holding in Japanese affiliate Ikoma to 51 per cent.
Mr Blain said the key profit drivers in Asia Pacific last year were Hong Kong and Singapore, but Japan and Greater China would be the key drivers this year in view of their market growth.