Along with global property markets, Asia Pacific real estate stocks sank in September as the markets were upended (once again) by the prospect of higher interest rates. For the month, the SNL Financial Asia-Pacific Real Estate Index (which includes Australia) declined by 6.5 percent, compared with a decline of 5.6 percent for the Global Real Estate Index, with regional returns denominated back to US dollars and country returns in local currency. While the month’s results were disappointing, the market’s response to potential higher interest rates was not unexpected and is another reminder of heightened public market volatility that can be expected until the economic environment becomes more settled. For the year through September, the Asia Pacific region has posted modestly positive returns of 3.1 percent, though that trails global real estate returns of 7.1 percent.

While there was general weakness particularly across developers in September, Japanese real estate stocks