In 2014, Asian outbound property investment set a new high.

 

According to CBRE, Asian outbound commercial real estate investment hit new highs last year. According to CBRE, Asian outbound real estate investment totaled $40 billion, up 23 percent year over year. properties for sale

Over the course of the year, new investor types emerged, including Chinese insurance firms and Chinese property corporations, which boosted capital deployment into real estate.

As investors explore beyond traditional gateway markets, investment techniques have begun to change. In 2013, 60 percent of outbound investment went to five worldwide investment destinations, while that number dropped to 39 percent in 2014. In 2014, Paris in Continental Europe, as well as Los Angeles, San Francisco, and Washington in the United States, were notable benefactors of this trend.

In terms of asset classifications, Asian cross-border real estate investors began to diversify, investing increasingly in hotels and industrial, albeit office remained the most popular.

EMEA continues to get the highest portion of Asian investment, accounting for US$13.7 billion of the total, while its share of the total remained unchanged from 2013. Other regions saw significant increases in Asian investment, including the Americas (up 20% year over year), the Pacific (33% year over year), and Asia intra-regionally (58 percent year-on-year). Japan was the most popular destination in Asia, followed by China.

"Outbound investment for the whole year 2014 topped 2013, the second year in a row the region has hit a record high," Ada Choi, Senior Director at CBRE Research Asia, said. Singapore remained the most popular destination for outbound capital, closely followed by China and Hong Kong, all of which saw a growth in cross-border investment. The emergence of new sources of real estate capital, particularly insurers seeking to increase their allocation to real estate under more relaxed rules, prompted Singaporean investors to look offshore as a result of compressed yields in their home market and a scarcity of investible assets, while Chinese outbound growth was fueled by the emergence of new sources of real estate capital, particularly insurers seeking to increase their allocation to real estate under more relaxed rules. Chinese property developers have also become more active in international markets. In addition to direct investment, more seasoned Asian institutional investors from Korea and Japan are increasingly getting exposure through indirect funds and club partnerships. Established capital sources like these will continue to develop, but new capital sources like Chinese and Taiwanese insurance companies will have a substantial impact on global real estate markets in the future years."

"Last year was an important year for cross-border real estate investing—we witnessed the deployment of capital accelerate as a convergence of structural and cyclical factors encouraged pockets of fresh capital to enter the market," said Marc Giuffrida, Executive Director, Global Capital Markets Asia. This is a significant trend that we expect to continue in 2015. Chinese and Taiwanese insurers began to emerge as major players in global real estate markets in the second half of 2014. Along with the influx of new cash, early adopters of global investing are expanding their tactics outside traditional gateway cities. While trophy asset acquisitions continued to make headlines, and New York and London remained the top investment destinations, the movement into secondary gateway cities such as Paris and Los Angeles, as well as regional centers in the United Kingdom, was perhaps the biggest unreported story of 2014. The diminishing concentration of the top five worldwide destinations among the total pool of Asian cross-border investment exemplifies this trend. Similarly, the types of assets sought by Asian investors are changing. While office remains the preferred asset type, particularly for new investors, hotel and industrial assets have seen a major increase in activity. Investors believe that by moving to new markets and asset classes, they will be able to get higher rates while facing less competition."