Investors positive about mainland real estate

Real estate investors remain positive about investing in the Chinese mainland although they continue to weigh up current market uncertainties due to COVID-19 and the geopolitical environment, according to an investors' survey released on Wednesday by international property adviser JLL.

About 51 percent of global investors want to increase their exposure to the Chinese mainland while 41 percent said they would keep their investments stable, said JLL, which surveyed 38 global investors collectively holding over US$1.8 trillion of assets under management on how COVID-19 affects their strategic investment decisions and planning.

"The Chinese mainland is one of the most popular and most resilient investment destinations in Asia Pacific," said Roddy Allan, chief research officer, Asia Pacific, JLL. "Three quarters of large investors with over US$20 billion assets under investment plan to increase or keep their exposure the same and intra-regional investors are also more positive about investing in the market."

By property type, appetite for office assets remains high on the Chinese mainland, accounting for 70 percent of the total investment.

"Assets with stable cash flows will continue to be favored by investors," said Jim Yip, head of capital markets, JLL China. "In addition, relatively low lot sizes and superior returns make alternative asset classes such as cold-chain storage and data centers, among others, an attractive investment option for many investors."

The increased focus on core markets and sectors is not a trend only for the Chinese mainland, but for the entire region, with investors continuing to seek defensive locations and sectors where the rental collection experience has been positive.

In addition to the Chinese mainland, Japan and South Korea remain high on the preferences for clients, as do sectors such as multifamily, non-discretionary retail and logistics, according to the survey.