‘New world disorder’ the top risk for global investors
An asset price bubble and the risk of a correction, the Trump presidency and populism are the biggest risks on the radar for global investors in 2018, according to ANREV.
ANREV, the Asian Association for Investors in Non-listed Real Estate Vehicles, recently surveyed institutional investors and investment professionals at its annual conference in Hong Kong.
Among major global economic challenges, 61.1 per cent of those surveyed ranked an asset price bubble and the risk of a correction as their greatest concern.
Global inequality (16.7%), flat demographics and productivity (11.7%) and rising interest rates (10.5%) were also concerns.
In the geopolitical sphere, delegates said the Trump presidency (36.5%) and populism (33.5%) posed the biggest risks, followed by military conflict with North Korea (15.6%) and Chinese President Xi Jinping’s consolidation of power (14.4%).
Speaking at the conference, economic analyst Rana Foroohar noted that “bifurcation” – or the growing divide between rich and poor – was one a major economic challenge for the investment community.
Two-thirds of the world were “on track” to be poorer than their parents, while 80 per cent of the world’s assets would soon be owned by 20 per cent of its people. Debt buildup and flat wage growth would compound this, Foroohar said.
ANREV’s experts agreed that global investment volumes are “steady” when compared with 2016, but that capital flows out of Asia are currently exceeding inbound flows.
Nevertheless, panelists and delegates pointed to momentum in Asian markets, given the desire of global investors for portfolio diversification. Maturing Asian markets would move more assets into institutional investment hands and create more opportunities.
Logistics in Asia Pacific is a bright spot in the region’s real estate industry, with 41.1 per cent of delegates seeing it as the “most interesting” new sector in the region.
Among other areas of interest were data centers (24.8%), student housing (11.3%), retirement homes (8.5%) and self-storage facilities (7.1%).