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Megatrends: Six forces shaping Asian institutional real estate investment
The old saying in real estate is three factors determine property values: location, location, location. Certainly, the locale of a parcel remains key, given the vagaries of property zoning and undulations of metropolitan markets. Unlike an equities manager, an institutional property investor needs to see the product and cannot buy or sell with a nose buried in a computer screen.
Yet as capital markets and commerce become globalised, the megatrends enveloping the Asian property scene must be acknowledged — sweeping, market-altering shifts in demographics and environmentalism, for example, or the actions of national governments. For better or worse, politics can make a nation an investable option or an international pariah for money managers of all stripes, including real estate titans.
Certain megatrends will frame the investment environment for Asian property buyers for decades to come. A property investor might outwait a business cycle, but fighting a megatrend coul