3. Preferred Sectors
When asked which property sectors were the top three preferable investment targets in terms of price appreciation and market growth, a dominating 82.9% of the respondents chose "Hotel" (Chart-4). As the foreign visitor arrival number grew faster than expected by 47% y-o-y to 19.7 million already in 2015 with the government target of 20 million by 2020, hotel occupancy rates have remained at an all-time high. "Hotel" had been regarded as a niche sector for specialists; however, many companies have newly established or strengthened their hotel investment teams recently. In addition to "Hotel," the number of respondents who chose "Resort facility" almost doubled to 13.5%.
The number of respondents who chose "Logistics facility" also increased significantly following a temporal decline last year (Chart-5). As volumes of logistics facilities were supplied in the fourth quarter of 2015 and are scheduled to continue, vacancy rates are anticipated to increase for a while. However, it is expected that the larger stock and more liquidity will enhance the attraction of the logistics investment market.
On the other hand, "Office," which had steadily ranked as one of the top main investment targets, declined significantly to 26.1% this time. Even with improving vacancy rates and rising office rents, the demand growth has recently shown some weakness
2. As the office market best shows a classic price cycle among the sectors, some respondents apparently anticipated the cycle to peak out and shifted to other growing sectors.
The number of respondents who chose "Condominium development" also declined noticeably. In addition to structural concerns based on the shrinking population, the recent sales slowdown with high prices and the fabrication of structural piling data presumably affected.