In early 2016, investors had two major concerns about Asia Pacific real estate: (1) the spillover effects of China’s economic slowdown and (2) the impact of interest rate increases in the United States. Both concerns have receded over the course of the year, while the sector has continued to grow in breadth and depth. Moreover, operators have also continued to adapt their business models, leading to new opportunities in a range of real estate sectors. Since the summer, we have observed increased interest in Asia Pacific real estate, a development that suggests investors have identified further opportunities in the sector. As a result, Admiral Investment holds a positive view overall on Asia Pacific REITs for 2017.

China’s slowdown

The first investor concern was how China’s economic slowdown might affect multiple economies in the region. Hong Kong, for example, as a major recipient of Chinese tourists, has seen tourist arrivals fall since mid-2015