Core real estate prices have gone through the roof, yields remain stubbornly low, and competition is tougher than ever for the limited number of assets in most major Asia Pacific markets. In the hunt for yield, are niche strategies a viable solution for institutional investors?
We may well look back and view the summer of 2017 as a turning point — a pivotal moment when our trajectory shifted and challenges such as extreme weather, overbuilding, poorly-designed infrastructure, urban density, population growth, limited resources and increased risk all suddenly came into focus.
As institutional investors around the globe hunt for yield, what should they understand about India’s property markets — the challenges and opportunities — if they are considering investing in the country?
The A-REIT sector has only recently recovered from four quarters of negative returns, delivering a total return of 1.7 percent for third quarter 2017. The prior negative performance of the sector has meant prices have reached levels that make A-REITs appear attractive again in terms of value and yield.
At the time of this writing in late October, Asia Pacific institutional investors, along with investment managers, will meet in Kyoto 7–9 November for our 10th annual Editorial Advisory Board meeting for Institutional Real Estate Asia Pacific. The confidential, formal discussion sessions held at the event are based on the industry’s most pressing concerns, which we compile from board members in advance in the form of “food for thought” topics.
Institutional investors around the world are continuing to raise their target allocations to real estate and have now broken the 10 percent barrier; at the same time, investors are still significantly underinvested against their targets.
October was another “up” month for the Asia Pacific property sector, as a continued strengthening in global economic growth prospects with still muted inflation are driving solid property fundamentals.