BEFORE the end of every year, Colliers International brings together the future thoughts and plans of real-estate investors in a document they refer to as the Global Investor Sentiment Survey (GISS). The aim of the annual survey is to provide the company’s clients with meaningful insights into the direction of investment markets for the following year.
Regularly writing about the property-development sector, I make it a point to read this report every year as it has always been a source of crucial property-investment insights. The great thing about the survey is that Colliers International allows the public to download and view the report, which, in its latest edition, canvassed the opinions of around 620 global investors—from institutions to private equity—from the United States, Canada, Latin America, Australia, New Zealand, Europe, Asia and the Middle East.
Acting as a road map of sorts for investors, both local and international, the GISS captures the trends and sentiments that dominated the past year. Although the findings of the 56-page report are truly comprehensive, quite a few dominant themes had taken shape.
In 2016 the GISS sees global investors maintaining and even possibly increasing the risk-taking attitude that they first adopted in 2014—expanding their risk portfolios by substantially investing in countries with high returns, motivated generally by a strengthening economic backdrop.
That said, the saturation of investors in the “safe haven” cities like New York, Paris and London has made it more difficult for these investors to find viable stocks. As this competition intensifies, more and more investors have started looking into their local markets to invest in liquid assets.
According to the GISS, although investment trends are often global, capital remains primarily domestic—with only 14 percent of investors willing to invest more than 50 percent of their total real-estate allocations outside their home region.
In Asia, more investors from around the region and western countries are looking at the behemoth that is China for investment opportunities. With its expanding infrastructure that caters to different needs, such as retail, housing and office space, China is presenting a diverse and relatively open playing field for global investors. Though eyes are generally on China, other Asian countries are still in the limelight as the continent still promises more growth.
According to the GISS, 3 percent of global investors will be looking into the Philippines. With much regard to the large work force and expanding middle class, more and more multiuse spaces are becoming prime investments.
On the same page as the global investors, Asian investors will be expected to invest more in their local markets as they continue to chase yield. The GISS shows that these local markets can provide just as much risk, but with a pace that is more familiar to the local investors On the whole, global investors are generally confident of the property market and are looking to increase their investments.
Although they acknowledge that obstacles are indeed in place, and the seeming lack of stock has made the markets even more competitive than ever, still, there is a general optimism that property will continue to rise in the coming years.
According to Colliers International’s Julius Guevara, director of Research and Advisory Services, in the Philippines, most developers are scaling back after a massive construction of middle-market residential condominium units in the past few years. Although residential development will slow down, office development will continue to thrive, as the business-process outsourcing industry, one of the main drivers of office-space sales and leasing in the Philippines, continues to grow. As we enter 2016, the Philippine real-estate scene continues to exude optimism and is once again a ripe place for investments. With more investors taking on the risk-taking attitude, coupled with a thirst for both international and local investments that can provide relatively high returns, the Philippine real-estate scene can expect a year of interesting developments for anyone brave enough to take the leap.