DTZ's Ma: Asian investors to maintain focus on large lot sizes

Asia Pacific (AP) investors will be more active in Europe this year than in 2013, according to Jingjing Ma, DTZ’s newly appointed Asian investment specialist.

Jingjing Ma joined DTZ’s EMEA capital markets team in London earlier this year as Asian inward investment specialist and reports to its head Paul Boursican. He previously worked for the city of Paris’ economic development agency where he was responsible for attracting Chinese real estate investors and Chinese corporations into France. Ma graduated from Beijing International Studies University and French business school HEC. Here he tells PropertyEU about the priorities in his new role.

What is the outlook for Asian investment into Europe this year?
Ma: Our expectation is that Asia Pacific (AP) investors will be more active this year than in 2013, investing between €12 bn and €14 bn. Last year, AP investment accounted for €9 bn of the €139 bn invested in Europe, an 80% increase on the €5 bn recorded in 2012. We identified 77 transactions involving AP investors in 2013. The top three most active AP investor groups were from Singapore, China (with €2.4 bn of acquisitions if we include the deals completed by Hong Kong investors) and South Korea. The biggest deals included GIC’s $2.7 bn (€2 bn) Broadgate deal and China’s Ping An buying the Lloyds Building in London for $400 mln.
With the exception of the UK which accounted for more than 84% of the AP inflows in 2013, Germany, France and Belgium were the main targeted locations. Investors have also been active in other countries such as Italy, Spain, Poland, Switzerland and Turkey, albeit on smaller lot sizes.

Which countries/markets in Europe will benefit most from Asian investment this year in your view?
Ma: We can expect to see more activity on the Continent going forward with a specific focus on big lot size investment opportunities (above €100 mln) in countries with plentiful supply and solid economic fundamentals such as Germany and, to a lesser extent, France.

We’ve seen a lot of sovereign money flowing into Europe from Asia in recent years. This is now being followed by government, pension/insurance and private capital. Is this trend set to continue?
Ma: We expect to see a wide range of AP money invested in Europe in the future Sovereign funds have remained the most active purchaser, but we have also noticed a surge in activity from institutions (from €746 mln in 2012 to €1.4 bn in 2013) and private investors. This diversity in AP capital flows targeting the European market is not totally new. AP quoted funds have been active in Europe for a long time now; they steered well clear of the region during the crisis (2008-2010) but have come back gradually since then.
AP institutions (mainly insurance companies) are more recent arrivals - they have invested €1.1 bn on average in Europe from 2009 to 2013. South Korean, Malaysian and Australian insurance and pension funds have now been joined by some Chinese ones such as Ping An. The improvement in the European economic climate should ease capital flows from AP institutions into Europe.

Did you deal with any property investors in your previous position?
Ma: I was involved mostly with private investors and conglomerates from China and Korea, such as Wanda Group, providing them with information and advice on the French real estate market.

As someone with a foot in both Western European and Asian cultures, what would you say are the main challenges for those seeking to attract Asian investors to Europe?
Ma: To be open-minded and to respect their way of doing business, and to gain their trust. Asians tend to be more indirect and prefer doing business with people they trust. Relations matter for most of the Asian countries.

What are the main challenges from (Asian) investors’ point of view?
Ma: Understanding the market and finding the right local partner, especially for new players in the market who lack experience in the international market. A reliable local partner is the key to success. It is also more efficient to have an international team based in the targeted market which can interact with the local business partners.

What do Asian investors seek most in a (real estate) investment in Europe? (in terms of property sector, location, returns, tenants etc)
Ma: Asian investors are clearly focusing on the office sector (€6.9 bn of the €9 bn invested in 2013), but have also been active in the mixed-use, retail and industrial sectors – witness the acquisitions carried out in 2011 by Goodman, Valad and some Japanese funds. Their choice in terms of location will be driven by a combination of several elements: good economic prospects, the availability of medium/big lot size opportunities and the liquidity ratio (which demonstrates the ability to sell the assets if necessary).

At a personal level, what made you switch from a job with a broad business scope to a more specialist position in property advisory?
Ma: Although I was passionate about my former role in Paris Developpement, where I was involved in many industries, I have always wanted to be specialised in one area. When I begin to do something, I want to follow the whole process through. This is my personality. Then the strong interest from Asia investors in the European property market is very palpable. So when DTZ told me they had a position in London, I applied instantly, since I see great potential in this position and in this market.

Where do you see yourself professionally in five years time?
Ma: Busy helping Chinese investors across Europe.

What are your interests outside the office?
Ma: Cinema. Good food. Go to the gym. Travelling, but elsewhere than Asia!

What are your three favourite buildings in Europe?
Ma: Opéra Garnier de Paris.
Église Saint-Eustache (Paris)
My new home in St Pauls’ area in London

Who is your favourite architect?
Ma: Paul Andreu who designed the National Theatre of China on the ChangAn Avenue.