Asia Pacific REIT Roundup: Though Fundamentals Remain Strong, Asian REITs Backslide a Bit Amid Policy Restrictions and Inflation Fears
After posting tremendous gains both in 2009 and 2010, Asia Pacific REITs so far in 2011 have mostly stalled and retreated. Inflation fears, interest rate hikes, the Japanese earthquake and ongoing policy restrictions impacting the residential sector in Hong Kong, Singapore and China have all conspired to create mostly negative returns. Australia is the happy exception. Japanese REITs, though taking a strong hit immediately after the earthquake, staged a quick comeback. M&A activity and sponsor changes throughout the Asia Pacific region have strengthened the quality of Asian REITs, and economic growth will likely remain robust for the foreseeable future. The selective investor will find many attractive points of entry.
Listed real estate securities, including REITs, in the Asia Pacific region were generally laggards for the first half of 2011. They posted a negative total return in local currency and underperformed both their European and North American counterpar