While UK/EU struggle with post-Brexit blues, Asia Pacific sees opportunities.
Contrary to the heated mood in the European Union, the mood post-Brexit is pretty much upbeat in Asia Pacific as there is a general view that more funds will flow to Asia Pacific and that more Asian buyers would step up their investments in the UK to take advantage of the weaker pound. Australia, Japan, Singapore and even China are said to be the biggest beneficiaries of Brexit as investors shift their focus from the UK/EU to mostly the first 3 nations. These 3 countries are universally acknowledged as being safe and stable with great upside potential regardless of the market turmoil besetting the rest of the world.
Interestingly, Brexit’s negative repercussions are considered relatively mild in most of Asia. The pessimists, however, are of the view that a weaker UK and Europe will hurt Asia’s current account-exposed trading nations in ASEAN and Australia.
The direct impact on Australia is fairly limited, partly because of its reliance on its Asian trading partners. On the other hand, Australia may receive increased interest from Asian investors due to it being seen as a safe, politically and economically stable environment compared to the volatile European environment. It is also seen as sharing many similar attributes to London including a transparent and liquid market, and world class education.
Real estate, led by Sydney and Melbourne, may even trend higher as a core gateway investment destination.
The direct impact on the domestic real estate market in Japan is likely to be muted, says Takeshi Akagi, head of JLL Research in Japan. “Domestic investors are the current drivers and their appetite for investment looks unlikely to waver significantly especially in view of an ongoing scarcity of asset.”