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Asian Investors Flock to US Commercial Real Estate

By    |   Friday, 28 June 2013 07:49 AM

The rebound in the U.S. commercial real estate market carries a strong Asian flavor

Asian investors are buying more commercial real estate in this country than ever before, The Wall Street Journal reports.

Singapore, South Korea and China already have committed a record total of $5.2 billion for commercial real estate equity through mid-June, according to data from Real Capital Analytics.

Editor's Note:
Trump Says U.S. Losing Economic Power To China, No Longer A Rich Country

So why the heightened interest?

"Some Asian pension funds are expanding and accumulating assets as they prepare to support aging populations; state-run funds are scouring the world for diversification and stability; and some Asian countries, including China, also are liberalizing rules about investment abroad," according to The Journal.

The investments have ranged from a Hawaiian resort, to a downtown Chicago office skyscraper, to a San Francisco condominium project.

Recent turmoil in global financial markets and the upward spike in interest rates could put a damper on the Asian surge.

But some Asian investors tell The Journal they're in it for the long haul.

"There is less pressure on these investors to chase yield," Howard Roth, head of global real estate for Ernst & Young, told the paper. "They are looking to invest for the next generation, not just for a few years."

Meanwhile, a KPMG survey of U.S. commercial real estate industry executives released Wednesday shows they think geographic expansion will be an important part of their companies' strategy over the next year amid increasing economic optimism.

A total of 58 percent of the 100 executives surveyed say they expect their company to raise spending most on geographic expansion, up from 21 percent in last year’s poll.

To be sure, while the outlook appears strong for U.S. commercial real estate, "there is also a feeling on the part of some investors that there should be some caution," Mitch Roschelle, a real estate executive at PwC, tells IPE Real Estate.

Editor's Note: Trump Says U.S. Losing Economic Power To China, No Longer A Rich Country

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Asian investors are buying more commercial real estate in this country than ever before, The Wall Street Journal reports.
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Friday, 28 June 2013 07:49 AM
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