- Biggest threats and appetite for acquisition/disposition
Respondents identified the impact of global economic shocks and a sharp rise in interest rates as the biggest potential threats to real estate investment in 2019. However, their appetite for acquisitions remains high. The percentage of investors expecting their total volume of acquisitions to increase y-o-y was higher than the previous survey, while the percentage of investors expecting their total volume of dispositions to increase was lower. This indicates that the supply-demand balance in the Japanese real estate investment market is likely to remain tight in 2019.
- Preferred investment strategies and asset types
Respondents identified the biggest impediments to acquisition as "asset pricing" and "availability of assets", and pinpointed their main reason for investing in real estate as "stability of income stream". Investors are increasingly cautious towards current pricing levels, and appear to be focusing on income rather than capital gains. Respondents named their preferred investment strategy for 2019 as "Prime or Core” and their most attractive asset type as "office buildings". However, there was some variation in investors' preferred investment strategy, with the number of those citing other strategies such as "Core-plus" and "Value-Add" increasing compared with last year’s survey, reflecting investors’ pursuit for higher yields.