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Outlook good for Asia-Pacific real estate
By Cherry Cao |
April 17, 2012, Tuesday
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Print Edition
Print Edition
THE Asia Pacific will remain at the forefront of global growth in terms of real estate investment in 2012 although liquidity has tightened across the region and reduced appetite for risk, according to LaSalle Investment Management in its latest investment strategy annual report.
Despite an increasing aversion to risks around the globe, the underlying economic strength of Asia-Pacific markets will be attractive to investors in 2012, with medium-term drivers of growth remaining intact across the region.
Urbanization, rising income and increasing productivity will continue to benefit emerging markets like China and India while commodities exports and a gradual recovery in domestic demand will fuel growth in Australia, the report says.
"The return profile for Asia Pacific will change in 2012 as bank finance has become scarce," says Paul Guest, Asian strategist at LaSalle, a member of Jones Lang LaSalle Group, the world's second-largest real estate services provider. "There's no top performer in terms of sector, but we expect modern logistics facilities to perform well in all of the major markets across the region this year."
The best direct/indirect investment opportunities for real estate in 2012 in Asia Pacific include:
China
The central government's infrastructure roll-out program leads to opportunities in building modern warehouse facilities in main transportation modes, and the expansion of high-speed railways will benefit certain cities and select residential markets.
Japan and South Korea
Appealing returns in those sectors where a scarcity of risk capital has halted development or made asset repositioning impossible, such as the regional retail market in Japan and the Tokyo residential market, where the income returns are also attractive. The continued evolution of the logistics network calls for the development of modern warehousing facilities.
Singapore and Hong Kong
The highly cyclical nature of the Singapore and Hong Kong markets means that core Grade-A office assets can become available with a short window of opportunities.
Australia
Though headline retail figures have been weak, non-discretionary spending remains strong, therefore making smaller convenience-based centers and regional malls good investment. Residential developments requiring mezzanine debt in cities like Sydney and Brisbane offer attractive returns.
Despite an increasing aversion to risks around the globe, the underlying economic strength of Asia-Pacific markets will be attractive to investors in 2012, with medium-term drivers of growth remaining intact across the region.
Urbanization, rising income and increasing productivity will continue to benefit emerging markets like China and India while commodities exports and a gradual recovery in domestic demand will fuel growth in Australia, the report says.
"The return profile for Asia Pacific will change in 2012 as bank finance has become scarce," says Paul Guest, Asian strategist at LaSalle, a member of Jones Lang LaSalle Group, the world's second-largest real estate services provider. "There's no top performer in terms of sector, but we expect modern logistics facilities to perform well in all of the major markets across the region this year."
The best direct/indirect investment opportunities for real estate in 2012 in Asia Pacific include:
China
The central government's infrastructure roll-out program leads to opportunities in building modern warehouse facilities in main transportation modes, and the expansion of high-speed railways will benefit certain cities and select residential markets.
Japan and South Korea
Appealing returns in those sectors where a scarcity of risk capital has halted development or made asset repositioning impossible, such as the regional retail market in Japan and the Tokyo residential market, where the income returns are also attractive. The continued evolution of the logistics network calls for the development of modern warehousing facilities.
Singapore and Hong Kong
The highly cyclical nature of the Singapore and Hong Kong markets means that core Grade-A office assets can become available with a short window of opportunities.
Australia
Though headline retail figures have been weak, non-discretionary spending remains strong, therefore making smaller convenience-based centers and regional malls good investment. Residential developments requiring mezzanine debt in cities like Sydney and Brisbane offer attractive returns.
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