Asian Pacific real estate market to grow significantly, increase liquidity
20 June 2013
By Asia Asset Management
The Asia-Pacific real estate markets have seen increased attention from international and local real estate investors, driven by the strong economic growth in the Asia-Pacific region. The Asia-Pacific real estate markets currently account for over US$7 trillion in investable real estate, being 27% of the global real estate market. This Asia-Pacific real estate market share is expected to increase significantly to 39% in 2021 and to 49% in 2031; with the Asia-Pacific real estate market size projected to increase from $7 trillion to $45 trillion by 2031, according to a new report released today by the Asia Pacific Real Estate Association (APREA), and authored by Professor Graeme Newell, University of Western Sydney.
This increase in the Asia-Pacific real estate market share will be driven by the significant role of the developing Asia-Pacific real estate markets, which are expected to see an increase in global real estate market share from 10% to 39% by 2031.
The report assesses the size, growth potential and liquidity of the Asia-Pacific real estate markets. In this international context, the Asia-Pacific real estate markets are expected to play a significant and increasingly important role, with increasing levels of liquidity. This presents a positive investment context for the ongoing role of Asia-Pacific real estate in a diversified real estate portfolio for real estate investors, with these opportunities expected to increase over future years.
Henry Chin, head of strategy and research Asia Pacific at Pramerica Real Estate Investors, said: "Given the interest from investors around the world in the Asia Pacific real estate markets, it is important to understand how their size can have a material impact on investment strategies. The fastest pace of growth globally is expected to be in the emerging countries of Asia, and Latin America, but the more significant increases in overall value will be in Asia Pacific. As an example, the growth of REIT markets in the region demonstrates the maturity and the magnitude of growth over the past decade and that's just the beginning. Given the predicted real estate market growth in Asia Pacific and the improvement of the institutional environment, the Asia Pacific real estate market provides the potential for investors to gain attractive risk-adjusted returns".
Professor Newell said: “As the Asia-Pacific real estate markets take on an increasingly important global role, liquidity will be a key requirement for international investors. Importantly, the Asia-Pacific real estate markets have increased their liquidity, with Hong Kong, Singapore and Australia seen as the most liquid Asia-Pacific markets, having comparable levels of liquidity to that seen for the more mature US and UK markets. This presents major real estate investment opportunities over the next 20 years for both local and international real estate investors.”
Lim Swe Guan, Chairman of APREA, said: “Real estate has benefited from its status as being both a store of wealth and income generator. Prime property holds its real value against inflation and thrives in an environment of sustainable economic growth, political stability, positive demographics and rapid wealth generation. We believe, with relatively better fundamentals compared to other regions, Asia Pacific real estate will continue to attract global funds that are seeking strong income and capital returns.”
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