Tokyo maintains its multi-year streak as the most preferred city for cross-border investments in 2023, according to an Asia Pacific survey by commercial real estate firm CBRE.
For the fourth consecutive year, Tokyo ranked as the most preferred city for cross-border investments, according to CBRE’s «2023 Asia Pacific Investor Intentions Survey». In the first three quarters of 2022, the Japanese capital accounted for 16 percent of cross-border investment volume.
Ranked as the second most preferred target was Singapore followed by Ho Chih Minh City, Sydney and Hong Kong.
Preferred Sectors, Strategies
In terms of sectors, industrial and logistics was the most preferred asset class while residential – especially multi-family and built-to-rent assets – registered the strongest uptick in interest.
By strategy, 31 percent of investors in the region will target opportunistic strategies, distressed assets and non-performing loans this year to capitalize on current market conditions.
Positive Outlook
Overall, the outlook by respondents was broadly positive with 93 percent of institutional investors looking to increase or keep allocations to real estate stable in 2023.
Nonetheless, there are still risks ahead for the asset class with investors citing the fear of a recession, interest rate hikes and a mismatch in buyer and seller expectations as the greatest challenges this year.
«Despite healthy levels of fundraising, most investors are adopting a cautious approach as they look for signs of yield expansion and the interest rate tightening cycle to stabilize,» said Greg Hyland, CBRE’s head of capital market APAC. «We are expecting investment activity to accelerate in the second half of the year.»
