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Property outlook for Asia 'bright in 2014'
Publication Date : 31-12-2013
The improving global outlook will spur property markets across the world next year, with emerging Asian cities such as Manila and Jakarta especially well placed to benefit, said Cushman and Wakefield yesterday.
In a report recently, the property consultancy also said investors see the US Federal Reserve's move to slow its stimulus spending as a signal that the American economy is on the mend.
That in turn, it said, will lead to more demand for real estate.
"The growing level of optimism and activity we are seeing in most regions has its roots in a belief that the global economy is set for calmer waters ahead," said David Hutchings, Cushman and Wakefield's research head of Europe, Middle East and Africa. "This is leading to an increase in risk appetites, which is manifest in a push to invest across borders," he added.
The firm expects global property investment volumes to increase 10 per cent to 15 per cent next year, crossing US$1 trillion for the first time since 2007. Global property investments came to $978 billion this year - up 8.4 per cent from last year.
Investment in the Asia-Pacific rose to $439.2 billion this year, up a modest 1 per cent to 2 per cent from $431.6 billion last year, on the back of slower but stable economic growth.
But Cushman and Wakefield said it expects a sharper increase of 5 per cent to 7 per cent next year as investors look for higher returns in cities in emerging economies, including Manila, Jakarta and Bangalore.
Asian investors are also expected to play a bigger role on the global stage as major powers like China and Japan increase their spending, said John Stinson, Asia-Pacific head of capital markets at Cushman and Wakefield. He added that property buyers are looking for stable, long- term investments.
Capital outflows from Singapore, South Korea and Malaysia should increase next year as a result.
The Americas was the best performer this year, recording an increase of about 20 per cent in property investments over last year. Cushman and Wakefield said it expected the region to continue to lead investment growth next year, with an increase of 18 per cent to 20 per cent.
Investment in Europe, which has been hit by a slew of austerity measures, should increase by 13 per cent to 15 per cent next year.
"The recovery (of the European market) is deepening and with more regional and global capital being diverted towards property, there appears more upside than downside potential in 2014," said the firm's European capital markets head Jan Willem Bastjin.