Investors expect Asian real estate market recovery to start in 2010

Investors are optimistic that the Asian real estate market will bounce back soon after being battered by the global financial crisis.

A survey by the Asian Real Estate Association (AREA) showed that more than half of the investors polled expect signs of improvements in the market by 2010.

This optimism has prompted investors to allocate more funds into all real estate investment categories in the next three to five years.

The optimism is due to continued growth in emerging Asian economies like China and India, as well as increasing levels of professionalism and transparency in markets like Singapore.

Observers said this is expected to fuel investor interest in the regional property market.

There has also been a shift in the perception of investors in favour of Asia.

Robert T. Lie, managing director of Redevco Asia, said: “When we look back a couple of years, Asia was seen as a very risky market so investors who are allocating funds to Asia are also demanding high returns. A lot of fund managers did what investors asked and developed a lot of opportunistic products.

“What we see now, more and more, is that Asia becomes part of the normal investment world, with room for opportunistic and value-added products, but increasingly for qua-type products – that’s definitely a development that we see.”

A survey by AREA also highlighted China, Australia and Japan as the top three countries for investments. China’s residential and retail, and Australia’s and Japan’s office markets were the preferred sectors in the region.

Among the three types of investors polled, institutional investors favoured residential and retail sectors in China.

Fund managers focused their investments on China’s retail sector as well as Australia’s and Japan’s office sectors, with Japan office investments the favourite among fund managers.

Interestingly, compared to last year’s survey results, Australia posted a huge leap in terms of investors’ preferences. AREA attributed this surge to possible property prices and currency effects, as well as a change of sentiments among investors.

The annual survey, which is into its second year, aims to provide a global view on the trends in Asia’s non-listed property market.

A total of 73 organisations in Europe, Asia and the US, including institutional investors and fund managers, participated in the online survey this year.

Source: Channel News Asia, 24 June 2009