Targeted investment strategies crucial in Asia Pacific real estate markets: LaSalle

By Valerie Kor
/ EdgeProp Singapore |
SINGAPORE (EDGEPROP) - Amid Covid-19 fears, real estate investment manager LaSalle Investment Management believes that there are many reasons for optimism on the Asia Pacific market, such as low-to-zero interest rates, ample liquidity and increased monetary and fiscal stimulus.
Nonetheless, in view of strong headwinds, LaSalle’s “Investment Strategy Annual (ISA) 2020” research report is recommending targeted real estate investment strategies, as individual countries may have different responses to the challenges and opportunities presented in today’s market.
Investors who are taking a defensive position will favour income-generating properties. Multi-asset portfolios prove attractive in a low-interest environment, which makes real estate yields more attractive.
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However, in 2020, total returns are predicted to decrease as compared to the previous few years. Returns will rely on occupier fundamentals rather than strong price appreciation.
As such, Elysia Tse, head of Asia Pacific Research and Strategy at LaSalle, says: “We continue to favour the Japan real estate market, as current strong real estate market fundamentals in Japan, particularly in Tokyo and Osaka office markets, offer more room to cushion shocks or weaknesses in the near term.”
Another area of relative strength is in the industrial sector, thanks to strong domestic consumption. There will be a high demand for improved amenities, logistics and cold storage facilities to cope with the expansion of e-commerce, food processing and delivery businesses.
Despite decelerating global economic conditions, LaSalle believes that Asia Pacific will remain the fastest-growing region and China will continue to be a key driver of global economic growth over the medium to long term.
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