Asia – A Solid Prospect
Asia’s growth drivers remain intact
Asia’s stellar economic rise cannot be ignored by serious investors. Between 2004-2014, economies in developing Asia recorded growth of over 8%, more than double the global average of 3.9%. Powerhouse China is now the second largest economy in the world, and Standard Chartered Bank projects that it could take pole position by 2020.
Positive domestic and external factors to support the region
Asia’s strong performance is grounded in firm fundamentals, including steady income growth, rising employment and consumption, and diversification from traditional manufacturing into new growth engines, particularly services. Much of developing Asia is characterised by a younger demographic profile, which is creating new catalysts for growth as young people flock into cities in search of employment and new urban lifestyles. These structural drivers have attracted foreign investment, making Asia a key player in global trade and finance. The regulatory environment has also seen dramatic improvement. More than a decade after the Asian financial crisis, safeguards and corporate governance standards have been enhanced, yielding greater financial stability.
Investment opportunities abound
Asia provides a solid platform for global property investors, attracting vast inflows of capital. The huge diversity of Asia in terms of development stages alludes to a consistent flow of opportunities. Prior excess liquidity in Asia has prompted some authorities most notably in China, Hong Kong and Singapore to quell speculative pressures. However, the impact is expected to be one of containment rather than cessation. Positive structural factors have opened up real estate capital markets, such as the development of REIT structures in emerging markets, better transparency and favourable tax and regulatory changes. Development of the services industry has induced new demand for commercial and retail space, while the continued influx of expatriate professionals will sustain demand for luxury housing in many markets. In summary, opportunities abound in Asia for investors seeking better returns coupled with relative stability.