Asian Property Outlook and Strategy 2012
Asian real estate shines through the dark clouds
Pacific Star Group’s Asian Property Outlook and Strategy 2012 report projects a bumpy ride for the global economy in the coming months. Drivers of growth are wearing thin in the U.S. while Europe is beset with its own political, economic and social challenges. However, Asia is likely to ride out the storm better, given its stronger balance sheet fundamentals and room for policy manoeuvre. Although not completely decoupled from the West, Asia’s economic fortunes are now more insulated as a result of greater trade integration and rising domestic demand. Given Asia’s resilience, our view is that real estate in the region remains as an attractive asset class for investors embarking on greater diversification. Investors looking to capture longer term potential for the region can adopt a measured approach to investments.
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Despite a challenging environment and lower transaction volumes ahead, buying opportunities exist, albeit in a more limited fashion. |
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The retail sector looks most favourable given the tight labour market and buoyant tourism. Many international retailers and luxury labels are expanding in Asia despite the global slowdown. |
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Office rental rates may moderate in 1H 2012 for most Asian cities as a result of lower hiring intentions. In the longer term, however, firms will continue to expand their foothold in Asia. |
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Although earlier cooling measures are still impacting sales and capital values across Asia, we expect greater resilience in mass housing markets in cities that are supported by migration and upgrader demand. |
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