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Real estate competition intensifies in Asia Pacific

That’s the view of a group of investors managing more than $2 trillion in assets across the Asia-Pacific region, published in a recent report.

According to JLL’s 2022 Investor Sentiment Barometer report, 82% of the 37 investors surveyed cited competition in real estate as a major challenge to their investment strategy this year.

“Despite heightened volatility in global equity markets, we are seeing increased competition in the real estate market. Product scarcity has prompted many investors to focus on platform deals and mergers and acquisitions,” the report said.

But 90% of investors still confirm that they will increase their investment in Asia-Pacific real estate this year, according to a survey by consulting firms. They intend to deploy capital through direct investment and joint ventures.

About half of investors expect a new milestone this year after the region’s deal volume hit a record $177.3 billion in 2021. The research unit believes this could lead to more pressure on property prices in the near future.

Some of these investors also believe that a diversification strategy is needed against the backdrop of increasing competition in real estate. Geographically, investors see Japan, South Korea and Australia as the largest investment regions. By industry, logistics will continue to attract significant capital, followed by multifamily and office real estate.

On the other hand, many investors are also reconsidering their strategies and risk tolerance. The booming real estate market in the past period, coupled with a competitive investment environment and potential capital allocation needs, has led investors to pay more attention to core investment strategies and pushed up prices. treat.

Nearly 60% of investors said they would focus equal or more resources on a stock exchange or platform to complement their direct investment strategy.

What do you think?

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