Although the US Federal Reserve has started to raise interest rates, the interest rate environment should remain benign in 2016. Given the slowdown in the China economy, we continue to see opportunities in REIT programmes. Selected REITs in Singapore and Hong Kong are trading at more substantial discounts to net asset value than warranted by our interest rate outlook. These REITs may offer some alpha opportunities.

The Asia Pacific economy

In general, 2015 overall GDP growth in Asia was weaker than 2014, declining from 5.3 percent to 4.9 percent. Oxford Economics forecasts growth in Asia will pick up in 2016 and 2017, then gradually return to trend growth in 2018 and 2019. Thus, overall GDP growth in Asia is forecast to return to 5.3 percent in 2016 and increase to 5.5 percent in 2017, before slowing back down to 5.3 percent in 2018 and 5.0 percent in 2019.

Given China’s reported 2015 GDP growth was the slowest in several years, we believe it