The summer stock swoon continued in August as investors were spooked by the Chinese government’s surprise devaluation of the yuan, the prospects of the global economy slowing further and, as a result, uncertainty over the US Federal Reserve’s interest rate intentions. The result was a US$5 trillion valuation decline in global stocks and the biggest two-month drop for Chinese stocks since 2008. Real estate (whether developers or REITs) was not immune to the sell-off, with a decline of 6.8 percent and 9.3 percent for global and Asia Pacific real estate stocks, respectively, during the month. The two-month drop has now erased any gains within the real estate sector for the year, with the region down 8.5 percent year-to-date and all the region’s major countries in negative-return territory (based on SNL Financial data, with quoted returns in local currency).

On a country basis — as would be expected given concerns over the Chinese economy — the regional decline was led