Family offices hunt for cut-price real estate deals across Asia

Family offices and ultra-high net worth investors are bullish on the market this year, following a bumper year in 2023. This is in contrast to institutional investors, who continue to dump property.
Family offices hunt for cut-price real estate deals across Asia

Family offices and ultra-high net worth investors have stepped up their real estate buying as institutional investors retreat from APAC’s troubled market in the face of high interest rates and falling capital values.

“We have been an active advocate to increase allocation to real estate particularly in this cycle where valuations look attractive," said Joe Kwan, managing partner, at Raffles Family Office in Singapore.

Joe Kwan
Raffles Family Office

"The current real estate pricing correction - even in core Asia-Pacific markets where fundamentals remain strong – is looking extremely interesting and this is fast developing into an exceptional vintage year."

Kwan said he expected future bargains as institutional investors, squeezed by rising borrowing costs from high interest rates, sought to dump poor performing real estate assets.

“High holding costs will pressurise these investors into heading for the exit, causing yields to rise and real estate valuations to slide. For others, this will present an opportunity,” he said.


AsianInvestor reported in January that more than 40% of APAC investors will be net sellers of real estate this year, the highest proportion since records began in 2014, according to CBRE’s 2024 Asia Pacific Investor Intentions Survey.

“This [correction] is even more significant for private wealth and family offices. They are not highly indebted, can operate with long holding periods, and have a preference for iconic assets. Although a high interest environment is not conducive to real estate valuations, problems are only likely to emerge when the use of debt has been excessive. There will be strong buying opportunities in this down cycle,” noted Kwan.

Andrew Sharrock, chief investment officer at Landmark Family Office in Hong Kong, said recent price corrections had improved capitalisation rates, making the sector more appealing.

“In some regions, we have seen a correction occur in valuations which has improved capitalisation rates and made [the sector] more appealing. Development opportunities and direct co-investing with established property managers is more widely available at better entry points as funding markets remain challenging,” he said.

Andrew Sharrock
Landmark Family Office

Sharrock identified demand for hospitality assets in particular, despite growing investor flows from private investors last year.

“During 202, there was increased appetite from family offices to gain exposure or increase exposures in hospitality assets. This really was following the reopening theme and strong demand for travel and tourism as all COVID-19 restrictions were removed.

"We expect the theme to stay in 2024 especially in the luxury and wellness segment of the market, although we do feel that hospitality has become a crowded trade,” he said.

Kanu Gupta, chair of Singapore TIGER 21, said that the region was proving increasingly appealing to members of the global peer membership organisation.

TIGER 21 opened its Singapore group, its first in Asia, late last year. The groups, which comprise ultra-high-net-worth entrepreneurs, investors, and executives, now number 106 in 46 markets, collectively comprising 1,300 members, representing assets of over US$150 billion.

“Significant investment interest exists for Japan given how well the markets have performed recently and there is particularly strong interest in its real estate markets due to high quality yields. The interest rate shifts in countries such as Japan and India are presenting attractive opportunities for investors to enter,” he added.  


Neil Brookes, global head, capital markets, Knight Frank, said preliminary data for last year suggested private capital investment volume for high-net-worth individuals (HNWIs) in commercial real estate hit its highest level in five years -- $4.3 billion.

Neil Brookes
Knight Frank

“Driving decision-making was simply the pursuit of capital preservation rather than chasing yields, and with ample cash reserves, the reliance on debt to fund acquisitions is eradicated. That allows these HNWIs to move quickly to secure assets at competitive prices," he said.

"In the higher-for-longer interest rate environment, we expect private capital to remain a driving force in the Asia-Pacific market."

CBRE’s investor intentions survey found that high-net worth investors and family offices will outpace institutional investors as the most active buyers of real estate this year, with 15% net buying intentions compared to 4% for institutional investors, who continue to wait for price adjustments.



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