APAC investment managers in non-listed real estate have strong intentions to increase their allocations to China and South Korea while shying away from Australia, according to a new survey.
A market sentiment survey taking the pulse of 15 of ANREV’s (Asian Association for Investors in Non-Listed Real Vehicles) members during COVID-19 has found investors and managers are re-examining their portfolios in light of the crisis.
Of the respondents, 75 per cent said they are revising their investment plan compared to a month earlier, but appetite for Asia-Pacific real estate continued to look robust, as 70 per cent said they were confident about increasing their weighting to the sector in the region this year.
However, ANREV noted the largest shift came in intended investment destination. The most favoured places among investors and managers to increase allocations are China and South Korea, with 53.3 per cent of respondents intending to raise their Chinese real estate weighting, while 46.7 per cent said the same for South Korea.
Meanwhile Australia and Japan were not as popular, with 33.3 per cent saying they would increase allocations to the regions and 16.7 per cent and 8.3 per cent declared intentions to move away from the countries respectively.
ANREV reported its larger annual investor sentiment survey months before in January had seen 140 members vote Australia and Japan as the most preferred real estate investment destinations.
Amélie Delaunay, director of research and professional standards at ANREV said: “Despite the havoc [brought] by COVID-19, senior investors in [Asia-Pacific’s] real estate market still appear to have strong appetite to increase their exposure to the region, an indication of the important role it continues to play in diversifying investment portfolios – even during difficult times.”
“It is worth bearing in mind that non-listed real estate investing is often a long-term commitment and that [Asia-Pacific] real estate as a whole continues to rest on sound fundamentals that will continue to make it an attractive investment destination for years to come.”
In terms of sectors, there was an interest in increasing allocations to the industrial and logistics sectors for 93.8 per cent of respondents, as well as residential (56.3 per cent) and data centres (25 per cent) – all of which are sectors that have seemed more resilient to the current crisis.
However, retail and hospitality could see withdrawals, with 100 per cent and 25 per cent of respondents respectively indicating wishes to decrease their allocations to the sectors.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].