Foreign capital inflow into Pacific real estate in 2017 totalled $9.4bn, down 34% from the $14.1bn recorded in 2016.
In comparison to 2016, the office sector was the only asset class to attract more investment activity from foreign buyers, with total transactions (by value) growing by 48%. By contrast, the hotel and industrial sectors recorded declines of 51% and 48%, whilst foreign investment into retail assets declined by 69%.
As was the case in 2016, the three main sources of foreign capital into the Pacific were Singapore, China and the U.S. Whilst China provided the largest source of foreign capital in 2016 ($4.7bn) tighter capital controls saw this volume of activity drop 62% to $1.8bn and, in so doing, surrender top spot to Singapore ($2.8bn).
In 2017, total outbound investment volumes ($1.8bn) dropped to their lowest levels since 2012, with strong property fundamentals and higher yields relative to other markets continuing to act as motivators for Pacific investors to keep their capital in the region