Asia Pacific confidence rises, with investors targeting office stock: Colliers

Asia-Pacific investors are the most confident globally about property investment conditions with office stock becoming the favoured stock, according to the 2015 Colliers International Global Investor Sentiment Survey.

Confidence in Australian property has accelerated over the last year, with 60% of respondents expecting economic conditions to improve, compared to 35% last year. Just 7% this year said they had any expectation of deterioration.

Colliers International’s managing director of capital markets and investment services, John Marasco, said that the outlook for investment volumes is positive.

“Only 5% of investors stated that they expected volumes to decline, with the majority (83%) expecting an increase in 2015 compared to 2014 levels. This is a substantial increase from the proportion expecting an increase last year, as well as the highest percentage recorded in our survey globally,” he said.

Similar levels over 2014 are expected to those seen in 2013, although it’s unlikely to achieve 2007 levels overall.

However, with a lack of stock investors are opting for different assets.

“In Australia, we are therefore seeing more investors moving in secondary office markets and showing greater interest in industrial. We are yet to see many Australian investors move offshore however we consider it likely in the next two years as competition for stock continues to intensify,” Marasco said.

CBD offices continues to be the preferred investment product among 39% of local investors, 1% lower than 2013. Industrial and logistics was recorded as the preferred investment class of 36% of respondents, compared to 27% in 2013.

The proportion of investors planning to increase the size of their portfolios has increased; 83% are looking to expand, compared to last year’s 72% response. AMP, GPT and REST were noted as particularly active.

In comparison to 2007, A-REITs will continue to focus on local markets. Marasco notes they may start looking offshore over the next two years as access to stock becomes even more constrained. Meanwhile, offshore investors have been entering the Australian market.

Pacific investors prefer investing in Sydney, with 58% opting for New South Wales’ capital. Brisbane and Melbourne followed closely behind at 44% and 43%.