The real estate secondary market is growing up fast. A few years ago, real estate secondaries were perceived almost exclusively as the meeting place of distressed, liquidity-challenged sellers and opportunistic buyers. That is no longer the case.

The lending environment across the Asia Pacific region remains relatively positive, with improvement seen in most markets during the past year. Access to debt has improved in a number of markets, and lending margins have for the most part sharpened. Banks continue to demonstrate an appetite for providing senior debt against quality assets, although with conservative loan to values (less than 60 percent) on typical three- to five-year terms.

Real estate markets may be reaching a transitional moment. Invesco Real Estate expects improving real estate market fundamentals to emerge in many markets worldwide over the coming years. Should this happen, there would likely be a transition from real estate total returns driven by yield compression, due to the weight of capital flows, to total returns driven by growth in operating income.

In May, I had the opportunity to attend the Myanmar Urban Development Conference in Yangon, Myanmar. As head of our Asia Pacific operations I follow new developments in Asia, and this conference attracted my attention from several important angles. The conference was organised by Sphere Conferences, a subsidiary of Singapore Press Holdings, the largest publishing and media company in Singapore and one of the largest in Asia.

Fundraising activity dropped sharply during the first quarter of 2013 compared with the high volume posted during last year’s fourth quarter. During the first three months of the year, 21 real estate funds announced final closings, with an aggregate equity haul of US$7.6 billion, according to the latest issue of Institutional Real Estate FundTracker.

Allocations to Japan’s equity market are at their highest since May 2006, with a “net 31 percent of global asset allocators overweight to Japanese equities,” according to the May 2013 BofA Merrill Lynch Global Fund Manager Survey. This is due in large part to a ¥10.3 trillion (US$106 billion) stimulus package passed by Prime Minister Shinzo Abe to revive Japan’s stagnant economy, and property stock investors are noticing the change (see “The music makers”).