There is a growing proportion of investors who are shifting their geographical focus from key South East Asia (SEA) cities to other regional cities in SEA. Out of the cross-border respondents interested in SEA, 40% of foreign investors are looking at these regional cities. Also, there is stronger interest in HCMC and Manila.

Increasingly, investors are on the hunt for higher risk-adjusted returns. Other than looking for assets with strong rental value growth driven by solid economic fundamentals, the emerging markets in SEA also offer a wider range of products with higher initial yields. That said, investors’ appetite for alternatives is rising, where retirement living and real estate debt are the top two attractive alternative sectors.

Buyers have indicated that they intend to ramp up purchasing activity in 2019. However they face obstacles such as high asset pricing and limited asset availability. This motivates a majority of investors (56%) to look for small deals which are less than $100 mil.