Rising risk appetite for Pacific property investors

There has been a resurgence in risk appetite for property investors in the Pacific region, according to a new Colliers International survey.

Next year 72% of investors in the Pacific region plan to expand their property portfolios , up from 56% last year, according to the 2014 Colliers International Global Investor Sentiment Survey.

Just 2% of respondents indicated they were not at all likely to take on more risk. Last year that figure was 70%.

This year 64% specified that they planned to take on more risk over the next 12 months.

The survey queried major institutional and private investors who were asked for their outlook at the global and regional level for 2014 and beyond.

Colliers’ John Marasco says Australian-based investors are becoming far more active.

“In 2012, investment volumes for some property types, particularly core property, were dominated by offshore investors,” Marasco says.

“With local investors back in the market, it is unlikely we will see this same sort of dominance in 2013.”

The report finds that to access a wider range of opportunities, as well as higher yields, many local investors are looking to secondary properties.

“As an example, a number of major Australian institutions are believed to be creating funds to specifically target non-CBD office properties as they seek to diversify their portfolios and target higher yielding assets,” the report says.

Most investors, 85%, are looking to buy within the pacific – mostly locally. Colliers puts this down to an easing of monetary policy over the past 18 months.

Otherwise 39% of investors are looking at Asia, 25% are looking at Europe, the middle east and Africa and just 13% are looking at the US.

Investors in the Pacific overwhelmingly prefer to invest in eastern seaboard Australia – 55% in Sydney, 12% in Melbourne and 4% in Brisbane.