Norway's oil fund has revealed it will invest in property in Tokyo and Singapore at the same time as a survey suggests high prices are an obstacle to making real estate deals.
Karsten Kallevig, head of real estate investments at the Norwegian oil fund, explained the fund's Asian property plans in an interview with Bloomberg.
According to a survey by property consultancy CBRE, however, the proportion of Asian investors who plan to make a property purchase this year fell ten percentage points to 54% compared with 2014.
Respondents said high prices were the biggest barrier to making deals and the biggest threat to the region's real estate market.
“Our view is that investment liquidity will remain abundant in the regional real estate market but that deal flow will be limited by investment opportunities and pricing,” says Ada Choi, senior director, CBRE Research Asia. “We thus expect only a mild increase in investment turnover in 2015, by about 3-5% year-on-year.”
The Norwegian fund, whose full name is the Government Pension Fund Global, is in line with investment trends when it says it will invest in prime property, however.
Respondents in CBRE's 2015 survey were more likely to say they favoured prime core assets than in the 2014 survey.
“The strong interest in prime core assets is being supported by factors such as the desire for wealth preservation and reduced expectations of sudden interest rate hikes,” says Richard Kirke, managing director, capital markets, CBRE Asia Pacific.
The CBRE Asia Pacific Investor Intentions Survey 2015 was carried out online in January of this year and is based on 300 responses from real estate investors such as fund managers, private property companies and banks.
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