Bricks And Mortar | Cooling measures in Asia spur capital flows to the West

The property market cooling measures imposed in Singapore, Hong Kong and on the mainland over the past few years have encouraged an increasing number of Asian investors to shift their capital from East to West, fuelling strong growth in international real estate investment in Britain, France, the United States and Australia.

Data from property consultant JLL shows that Asian buyers represented less than 10 per cent of the Central London commercial investment market in 2010 but close to 30 per cent by the end of last year. While London, Paris, New York and Sydney are the most popular places for Asian investors, their choice of destinations has been expanding, with German cities such as Berlin, Frankfurt and Munich emerging as new targets.

One reason for the move is that Germany is the biggest economy in Europe, and as the impact of the euro crisis diminishes, the country's economy has started to improve.

Driven by robust domestic spending, the German economy grew faster in the first quarter of this year than at any stage in the past three years, expanding by 0.8 per cent, according to Germany's federal statistics office. Overall gross domestic product in the euro zone rose by 0.2 per cent.

Another reason is that the German property market has become more active. According to Colliers International, Germany's commercial investment market recorded excellent first-quarter results, with transaction volume of €10 billion (HK$106.3 billion), a 41 per cent year-on-year rise, thanks to increased interest from international investors and a significant increase in portfolio deals.