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Wealthy investors become a leading force in commercial real estate, accounting for almost a third of all global transactions

13 June 2019

Wealthy investors become a leading force in commercial real estate, accounting for almost a third of all global transactions

·         Malaysia ranks the 5th in the Asia Pacific in terms of attracting cross border private capital investment

·         21% of ultra-high-net-worth-individuals plan to invest in commercial property in 2019

Malaysia, 24th April 2019 Private investors already a strong presence, are becoming an increasingly important force in the global real estate marketplace. Knight Frank’s Wealth Report 2019 reveals that 31% ($289bn) of all global commercial property transactions in the 12 months to Q3 2018 involved private capital – nearly a third. And, 21% of private wealth is held in real estate investments of some kind (excluding primary residences and second homes).

As private investors grow in importance, institutional investors are realising that they are a key buyer type whose drivers are often very different to their own and need to be understood; as they are likely to either be competing against them in a purchase negotiation or trying to sell to them as part of an exit.

Among Asian countries, Australia commercial real estate is the most popular destination for cross-border transactions by private capital with $2.8bn invested in the 12 months to Q3 2018. Malaysia ranks 5th, with $205 million invested.

Top destinations of cross-border investment in Asia Pacific for private capital by volume (12 months to Q3 2018)

No.

Country

Total $

1

Australia

2,831,479,567

2

Singapore

1,148,457,542

3

Hong Kong

933,761,006

4

China

463,023,111

5

Malaysia

204,868,439

Source: RCA

James Buckley, Executive Director of Capital Markets in Knight Frank Malaysia says, “In Malaysia, we have witnessed a notable increase in the number of commercial properties coming to the market in 2019, but it is really important to set the right asking price and for owners to have realistic price expectations. Properties will not sell and marketing simply becomes stale otherwise. We are seeing owners’ pricing slowly becoming more realistic and we anticipate sales volumes picking up this year with some great investment opportunities arising for shrewd investors, seeking to acquire assets at reasonable valuations.”

The most popular types of investment globally for private capital by investment volumes (12 months to Q3 2018).

No.

Property Type

Proportion

1

Apartment

35%

2

Office

29%

3

Retail

15%

4

Industrial & logistic

11%

5

Hotel

8%

6

Senior Housing & Care

2%

Source: RCA

Although apartment and office are the most popular types of investment globally, Wealth Report 2019 reveals the growing interest of private capital investing in specialised assets such as Senior Housing & Care, with 2% of them are looking to diversify their investments in this property type. 

In tandem with Malaysia’s demographic shift, this presents tremendous opportunities for this specialised assets to grow in the country.

End

To download the report, please click: http://www.knightfrank.com/wealthreport

For further information, please contact:

Ms Seline Soo, Marketing & Communications Manager, Knight Frank Malaysia

seline.soo@my.knightfrank.com +603 2289 9669 @KnightFrank_my

Ms Penny Hoo, Marketing Executive, Knight Frank Malaysia

penny.hoo@my.knightfrank.com +603 2289 9667 @KnightFrank_my

Notes to Editors

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 15,000 people operating from 418 offices across 60 countries. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit knightfrank.com.

Knight Frank has a strong presence in Malaysia with its headquarters in Kuala Lumpur as well as branches in Penang, Johor and Kota Kinabalu. The company offers high-quality professional advice and solutions across a comprehensive portfolio of property services and is registered with the Board of Valuers, Appraisers and Estate Agents. The Company is licensed to undertake property, valuations / consultancy, estate agency and property management and is also on the panel of all leading banks and financial institutions. For further information about the Company, please visit www.knightfrank.com.my.