Real estate investing in Asia has traditionally revolved around the economic giants of China and India. Most international investors have steered away from the Southeast Asian region — the emerging markets of Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Vietnam, as well as the developed market of Singapore — as a result of its diversity, lack of transparency and perceived higher risks. Our view is that this is a region that investors cannot afford to overlook.
From the Current Issue
In 2009, China surpassed the United States as the largest consumer of energy in the world. Rapid economic growth has caused China’s energy consumption to increase dramatically, and the country is now faced with the challenge of balancing an expanding economy with energy security, pricing, emissions and a declining fossil fuel supply. Meanwhile, the Chinese government is paying more attention to energy efficiency and is tightening regulations on the building sector.
Daily reports of downgrades and rumors of defaults in Europe all bring to mind the frightening fall of the global financial system that began three years ago with the collapse of Lehman Bros. on 15 September 2008. It feels like a “slasher” movie sequel — with an intensely scary set-up, an early victim or two, all ending in a bloody mess. This is a film we have seen before and don’t want to see again.
Investors in real estate funds may be confused by some of the regulatory changes occurring in the United States — particularly those requiring advisers to register with the U.S. Securities and Exchange Commission (SEC). At the most basic level, investors may wonder whether they should care about what’s going on and how much time it will take to figure out what really matters. All of this is part of the fallout from the Dodd-Frank Wall Street Reform and Consumer Protection Act, the U.S. law passed in 2010.
According to the third quarter 2010 Global Capital Trends report from Real Capital Analytics, transaction activity in Asia Pacific has improved since second quarter 2010. Bouncing back from a government-led attempt to put a cap on development in the region, China in particular has seen significant improvement in land sales.
MGPA intends to launch a core/core-plus special fund under German investment law that will target commercial property in established Asian markets such as Hong Kong, Japan, Malaysia, Singapore, South Korea and Taiwan.
After the earthquake-induced triple crisis of this past March, Japan saw property transactions plunge. Is it time to dip back into the world’s second-largest property pool?