Hines Research Reveals Key Real Estate Opportunities in Asia
Hines, a global real estate investment manager, has unveiled its latest research paper, “Why Asia Now.” The study reveals that allocating to developed Asia real estate can significantly boost risk-adjusted returns and mitigate downside volatility for global institutional investors, even when factoring in currency effects.
Positive Growth Outlook and Depth of Opportunities
Hines’ proprietary research underscores Asia’s promising growth outlook and the region’s extensive opportunities across various asset classes. The study identifies key entry points where Asia currently presents attractive investment potential.
“Fundamentals in Asia are pointing in a positive direction,” said Chiang Ling Ng, Chief Investment Officer, Asia at Hines. “Due to the region’s secular growth trends and unique market dynamics, we see Asia poised to generate a spectrum of opportunities.”
Diverse Investment Prospects
The region’s real estate investment prospects include core-plus and value-add opportunities in office, residential, industrial, logistics, and retail sectors. These opportunities are driven by Asia’s population growth and robust labor markets. Additionally, the region’s real estate market is expected to benefit from higher inflation, given the historical correlation between inflation and rental growth.
Self-Reliant Economies and Robust Growth
The study highlights that economies in Asia are becoming increasingly self-reliant, intra-regionally driven, and wealthier. The region is projected to grow at double the rate of the United States and Europe annually over the coming years.
“You can call Asia the ‘growth stock’ in a global real estate market portfolio,” said Tim Jowett, Head of Research, Asia at Hines. “As the region continues to grow and urbanize, we project its total value and share of investible real estate to also grow, reaching a point where Asia comprises the largest share globally. This will help create tremendous opportunities for investors. So, we’re very optimistic about Asia.”
Intra-Regional Diversification
Intra-regional diversification supports a more stable return profile due to the significant differences in monetary policies, interest rates, and real estate fundamentals across Asia. This lack of high correlation among individual markets allows investors to benefit from diversification.
Rising Investment in Luxury Condominiums
Luxury condominiums in key cities like Singapore, South Korea, and Sydney are emerging as attractive investment opportunities. These markets are driven by high demand from both domestic and international buyers seeking prime locations and high-quality living environments. The rise in affluent populations, coupled with limited supply of luxury properties, has resulted in strong capital appreciation and rental yields.
For instance, the upcoming Meyer Blue, a freehold sea view condo in Singapore’s District 15, is a prime example of a lucrative investment. This development offers unparalleled views and luxurious amenities, making it highly desirable among investors looking for stable and appreciating assets. Similarly, high-end condominiums in Seoul and Sydney are experiencing increased interest due to their strategic locations, robust infrastructure, and strong economic fundamentals.
Local Expertise for Capturing Opportunities
“With Asia’s diversity comes a deep but complex set of opportunities,” said Ng. “Capturing them requires local expertise to identify the right real estate, access attractive deals, and create value at the individual asset level.”
Conclusion
The “Why Asia Now” research paper is available for download on the Hines website. It provides a comprehensive analysis of why Asia presents compelling opportunities for global investors and offers a detailed roadmap for navigating this dynamic market.