Singapore, Ho Chi Minh City are top Asean picks for Asia-Pacific property investors: survey

SINGAPORE and Ho Chi Minh City are the top Asean cities in which Asia-Pacific-based property investors are interested, CBRE'S 2021 Asia-Pacific Investor Intentions Survey has found.

The survey findings, released on Wednesday, had Singapore in second place, and Ho Chi Minh City in fifth; this is the first time the Vietnamese city has entered the top 10.

Desmond Sim, head of research for South-east Asia in CBRE, said: "Singapore remains an important hub for foreign corporations looking to access South-east Asia." He added that although central business district (CBD) rents in the city-state fell last year, they are forecast to grow over the next three years, supported by low vacancy and strong demand.

This year, Singapore office demand is expected to be fuelled by Chinese technology firms and non-bank financial-services firms such as investment managers and hedge funds, he added.

As for Ho Chi Minh City, it has been on investors' radar in recent years, as it "is viewed as having the potential for greater appreciation in property values and higher yields", he said.

The survey, on cross-border investment intentions, received 492 responses from investors across Asia, with about a quarter each from Japan and China. Tokyo retained its top spot, with Seoul, Shanghai, Beijing, Shenzhen, Sydney, Osaka, and Melbourne rounding out the top 10.

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Among investors who were interested in South-east Asia, nearly two-fifths were willing to pay more than 10 per cent higher for real-estate purchases this year than they would have in 2020. Another fifth were willing to pay up to 10 per cent higher.

Value-add assets remain the most preferred sort, but attention has also turned to distressed assets, with 11.9 per cent of investors indicating interest, compared to none in 2020.

The industrial/logistics sector remains the top pick, with 39.4 per cent of respondents indicating interest, followed by the office sector at 35.8 per cent.

Interest in the hospitality sector has also risen, though it has stayed modest, with 16.7 per cent of respondents expressing interest. In the broader Asia-Pacific survey, hotel and retail interest was weaker, with interested investors seeking steep discounts.