Investors eye Asia Pacific amid euro zone uncertainty

AMID the uncertainty surrounding the euro zone, funds raised from property sales are being redirected to the stable Asia Pacific region.

AMID the uncertainty surrounding the euro zone, funds raised from property sales are being redirected to the stable Asia Pacific region.

Superannuation and company pension funds are the dominant buyers of property in Australia as they re-allocate funds out of cash into bricks and mortar to generate higher returns.

Investa Office Fund is the latest to raise cash through the sale of its 49 per cent stake in its last remaining US office tower at 900 Third Avenue, New York, for $US172.7 million ($161 million).

It was completed at an 8.7 per cent premium to book value and marks the exit from the US for the fund. It will now focus 100 per cent on the Australian office sector.

The group has raised $US180 million from the sale of four US assets owned by the ING Office Fund to which Investa bought the management rights a year ago.

Investa's newly-appointed fund manager, Toby Phelps, also expects to settle the sale of its NVH Building in Paris later this month.

Peter Zuk, Goldman Sachs' property analyst, said that as at June 2011, Investa's net equity interest in the New York asset was about $US27 million. Investa has indicated it expected net proceeds of $US19 million after adjusting for debt, taxes and transaction costs.

Mr Zuk said that with the NVH Building on track for settlement this month, Investa's remaining European exposure is Bastion Tower, Brussels and its equity holding in the Dutch Office Fund.

Lend Lease is reported to be one of four developers short-listed to redevelop the BBC headquarters in west London.

Lend Lease, which built the athlete's village for the London Olympics, is competing against Stanhope, a developer backed by Japan's Mitsui Fudosan, Sir Stuart Lipton's Chelsfield Partners and Resolution Property, the Times newspaper said.

A new survey reveals that Australia is the more favoured region for property investors.

CBRE's latest Asia Pacific ViewPoint shows respondents believe market sentiment deteriorated through the fourth quarter of 2011 as investors grew increasingly worried over the unresolved euro zone debt crisis and the uncertain global economic crisis. However investment volumes rose, primarily due to a number of larger sale deals.

Australia remains the standout market in the region as offshore groups continue to buy property and as domestic super funds re-emerge as active buyers.

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