Investors from the Philippines, along with other Asian countries, are increasingly developing an appetite for investing in European commercial real estate, according to a unit of ING Bank.
In a statement, Robert Scholten, head of ING Real Estate Finance (REF) Asia Pacific, a unit of ING Wholesale Banking, said Philippine and Asia-Pacific investors are choosing to invest in European commercial real estate to be able to diversify their assets.
Aside from the need for diversification, the increase in buying opportunities, lower interest rates, and favorable euro/USD exchange rates are drawing investors to Europe.
An example that Scholten cited was the acquisition of the Torre Espacio property by Filipino billionaire Andrew Tan from Spain’s Grupo Villar Mir of international construction group OHL last November.
Torre Espacio is a 224-meter, 56-story tower considered to be one of the most iconic skyscrapers in Madrid.
ING Bank noted that that it was the sole underwriter and mandated lead arranger for the 280 million euro, seven-year loan to finance 50 percent of the acquisition price.
Consuelo Garcia, ING Bank Manila country manager, said Europe, particularly Spain, is a good destination for Asian investors because of good property valuation, transparency, ease of doing business, and a specialized high-tech sector.
Meanwhile, Scholten predicted that outbound Asian investments would expand to different continents.
“It is likely that the outbound investment trend from Asia into Europe and also into other continents, including the Americas and Australia, for core quality real estate assets will continue to increase over the coming years,” Scholten said.
He also emphasized that most of the Asian investors are coming from the growing number of sovereign wealth funds, life insurance companies, asset management funds, and family offices across the region.
“Well-informed real estate investors are becoming increasingly aware that some of the overseas markets could offer interesting value propositions,” Scholten said.
In 2015 alone, ING REF said it has closed 80 deals worth 9.5 billion euros in total loan value.
It said that 15 out of the 80 transactions involved Asian institutional investors and family offices, and new investor segments such as Asian sovereign wealth funds. These property deals represented a double-digit percentage market share of all Asian institutional investment in Europe.