AMP Capital sees return to offshore property

With returns on the way back, now is the time for institutional investors to get back into offshore property assets – in particular, residential apartments in the US, according to AMP Capital Investors.

We are already seeing the return of institutional investor appetite for property, according to John Dynon, fund manager for the AMP capital global property fund.

There is a structural issue that is seeing diminishing availability of core domestic product, and with the superannuation guarantee set to rise from nine to 12 per cent, that availability will decrease further with greater super fund investment in available assets, Dynon said.

Having been through a severe market correction now is the right part of the cycle to get into offshore property markets, and prices are currently compelling, he said.

Many investors are also attracted by the current high value of the Australian dollar, which can buy more at the current rate, he said.

In the US, job growth will repair consumer confidence and improve rental and vacancy rates, said David Rabin, the managing director of private real estate for Urdang, one of AMP Capital Investors’ property partners in North America.

The coming several years represent a highly favourable real estate market entry point, and potentially the best buying opportunity since the 1990s, he said.

The US is facing a wave of mortgage maturities, of which roughly half of the loans are estimated to be underwater, and the confluence of all these market conditions will create a variety of opportunities to acquire or invest in high quality properties at deep discounts from peak pricing, he said.