Asia Pacific Investment Quarterly Research

Asia Pacific Investment Quarterly Q3, 2011

24 October 2011

Another quarter of turbulence in the global financial economy combined with a credit tightening cycle in China has had a negative effect on deal volumes around the region. Both investor and occupier markets have paused as news from Europe is digested and policy measures finally find some traction in terms of moderating overheated markets in China, Hong Kong and Singapore. Japan appears to be a tentative exception, with domestic activity picking up after a post-quake lull and pricing relative to potential returns attracting renewed interest from both core and opportunistic investors. Australia’s two speed economy continues to play out in property markets as Perth and Brisbane accelerate whilst other locations tread water.

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Asia Pacific Investment Quarterly Q2, 2011

16 July 2011

Unforgiving cap rate compression, a tighter monetary policy and a lack of available stock is pushing many investors further up the risk curve in China. Volumes in Japan remain subdued while investors size up redevelopment opportunities in older stock which has become difficult to insure and tenant. We note growing interest in Malaysia and Indonesia while Singapore offices are still at a discount to peak prices. Vietnam’s economic woes may provide an opportunity for overseas equity while the Philippines remains overlooked. In Thailand, some investors are looking to take advantage of a perceived improvement in political stability.

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Asia Pacific Investment Quarterly Q1, 2011

31 March 2011

Uncertainties seemed to crowd in towards the end of the quarter as Japan was rocked by its largest earthquake on record while in China rising interest rates and lower growth expectations added to the general gloom. While pipeline transactions could suffer, it is still too early to assess the longer term impact on Japan’s real estate market, but we believe that domestic investors, who have taken a lead in the nascent recovery, should remain active. Immediate challenges will come in the form of valuation and bank financing, not to mention volatility in the capital markets which will have a substantial impact on JREITs both in terms of unit pricing and a soft secondary offering environment which will hamper their ability to raise additional capital. In China, tighter credit conditions may present more joint venture opportunities as local developers turn to alternative sources of capital. The trick, as ever, is finding the right partner.  

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Asia Pacific Investment Quarterly Q4, 2010

03 January 2011

Despite a generally more positive outlook for the region, overseas funds are being increasingly thwarted by policy measures aimed at cooling overheated markets, aggressive local players and severely compressed cap rates. A sense of palpable frustration has set in in China where approvals to bring money onshore are slow to come, putting overseas capital at an immediate disadvantage to local investors. Japan, meanwhile, holds promise but forbearance to distress continues to limit high quality investment opportunities.  

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Asia Pacific Investment Quarterly Q3, 2010

01 October 2010

Policy risk in China, Hong Kong and Singapore remains signifi cant as governments get to grips with overheated markets. Generally, though, Asia Pacific investment activity levels during the third quarter were higher than during the second, but are still far from peak levels. Availability of institutional grade assets is limited as owners are well aware of the problems of reallocating capital to more productive uses. Cap rate compression is a feature of most sectors. Attention is currently focused on defensive assets including neighbourhood retail centres and logistics facilities, as well as offices where occupier cycles have bottomed out.

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Asia Pacific Investment Quarterly Q2, 2010

01 July 2010

Transactions volumes have generally receded in Asia’s real estate markets in the second quarter. Cooling measures in China have had implications for Hong Kong, Singapore and beyond while elsewhere fresh uncertainties surrounding the strength of global recovery have dogged markets. Cash rich local developers and investors have been reluctant to sell prime assets while lenders have remained forgiving. Bright spots include Japan, Taiwan and Australia, where both local and overseas interest is strong and this should translate into more major deals during the second half of the year. Signs of rental growth are emerging as office and residential occupier markets bottom out around the region and recent waves of new supply are taken up.  

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Asia Pacific Investment Quarterly Q1, 2010

01 April 2010

Fortunes have been mixed across Asia-Pacific’s real estate markets during the first quarter. While China, Hong Kong and Singapore fret about bubbles, few deals were done in Korea or Vietnam. Markets such as Tokyo and Australia still hold a great deal of promise but activity levels have yet to really gather momentum. In Taiwan, domestic investment has driven volumes, partly spurred by optimism over rapprochement with the Mainland. As growth returns to the region the dangers of inflation will gradually become apparent and interest rate risk will rise. If asset price bubbles become a problem in China, a measured policy response will be key, not just for the domestic market, but for Asia as a whole.    

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