Taiwanese life insurers seeking higher returns may purchase more properties in London, Paris and Tokyo to increase their total real estate assets by $9 billion in four years, according to CBRE Group Inc.
Commercial properties in London yield 4 percent to 5 percent annually compared with about 2.5 percent in Taipei, CBRE Global Chief Economist Richard Barkham said in an interview in Taipei on June 16.
“Taipei City’s spread of prime office yields over government bonds are among the lowest among major cities worldwide,” Barkham said.
“Taiwanese life insurance companies looking for higher yields in properties and diversification in portfolios are going abroad.” London and Tokyo are the top two investment destinations for international cross-border investors, CBRE Asia-Pacific research head Henry Chin said.
A weak yen and yields of 3.5 percent to 4 percent make Tokyo attractive, he said. Taiwan’s insurance companies have been on a hunt for foreign real estate after regulators eased investment restrictions.
Last month, Cathay Life Insurance Co. bought the Walbrook Building in the City of London financial district for 575 million pounds ($900 million) and Fubon Life Insurance Co. purchased the site of the Madame Tussauds waxworks museum.
CBRE estimates that Taiwanese life insurers’ combined domestic and overseas real estate assets will rise to $33 billion in 2018 from $24 billion last year.
Demand for global properties will be bolstered by low interest rates and excess savings over the next five to seven years, Barkham said.
The island’s central bank may not raise interest rates until mid-2016, Barkham said. Taiwan’s economy may expand 4 percent to 4.5 percent next year as Chinese growth bottoms out, the euro region recovers and U.S. consumption picks up, he said. Taiwan last month cut its 2015 growth forecast to 3.28 percent.
bloomberg.com
Commercial properties in London yield 4 percent to 5 percent annually compared with about 2.5 percent in Taipei, CBRE Global Chief Economist Richard Barkham said in an interview in Taipei on June 16.
“Taipei City’s spread of prime office yields over government bonds are among the lowest among major cities worldwide,” Barkham said.
“Taiwanese life insurance companies looking for higher yields in properties and diversification in portfolios are going abroad.” London and Tokyo are the top two investment destinations for international cross-border investors, CBRE Asia-Pacific research head Henry Chin said.
A weak yen and yields of 3.5 percent to 4 percent make Tokyo attractive, he said. Taiwan’s insurance companies have been on a hunt for foreign real estate after regulators eased investment restrictions.
Last month, Cathay Life Insurance Co. bought the Walbrook Building in the City of London financial district for 575 million pounds ($900 million) and Fubon Life Insurance Co. purchased the site of the Madame Tussauds waxworks museum.
CBRE estimates that Taiwanese life insurers’ combined domestic and overseas real estate assets will rise to $33 billion in 2018 from $24 billion last year.
Demand for global properties will be bolstered by low interest rates and excess savings over the next five to seven years, Barkham said.
The island’s central bank may not raise interest rates until mid-2016, Barkham said. Taiwan’s economy may expand 4 percent to 4.5 percent next year as Chinese growth bottoms out, the euro region recovers and U.S. consumption picks up, he said. Taiwan last month cut its 2015 growth forecast to 3.28 percent.
bloomberg.com
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