Residential real estate is the second top investment pick for the year 2012 across the Asia Pacific Region, according to “Emerging Trends in Real Estate Asia Pacific 2012,” a real estate forecast jointly published by the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC).
Covering 21 markets in the Asia Pacific, the study is based on the opinions of more than 360 internationally renowned real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants.
“Across the Asia-Pacific region, the industrial/distribution sector is top-rated, followed closely by residential real estate, both for-sale and rental. Office and retail sectors are in the middle of the range, while the hotel sector is least favoured for investment,” according to the study.
In spite the weak global housing market this year better prospects are seen in 2012, although caution and planning are still the keys to success.
What are the most favourable investments in the property sector?
Apartments. Interviewees favoured investing in multifamily property development, which can be class A, value-enhance class B, develop from scratch, purchase in infill areas, acquire in gateway cities, or hold in lower-growth markets. “Even buy class C and upgrade, spend a little more, hold a little longer—demand will be there.”
The only caveat: avoid severely affected housing markets where a surfeit of empty single-family homes will compete as rentals.
Fortress Malls, Infill Shopping Centres. Aptly named fortress malls, near upscale suburban neighbourhoods and strategic highway intersections, continue to concentrate the top brand chains and attract more shoppers away from their weakening competition—centres situated near older or more commodity class housing districts. These types of property development attract necessity shoppers to anchored centres with leading supermarket and drug store chains. Investors are in for steady cash flows.
Coastal Port Industrial Space. According to interviewees, global trade could still power property development and there would be demand for East Coast cities can position themselves to capture Pacific container-ship traffic slated to come through a widened Panama Canal in 2014. Some winners will turn into new industrial hubs, but first need to dredge harbor channels to handle deep-hulled vessels. Miami, Charleston, Savannah, and Norfolk look like prime contenders, and New York/New Jersey will not be left out. Houston should pick up business along the Gulf Coast.
The report noted that business centre hotels situated in some major 24-hour cities attract consistently strong combinations of business and tourist travellers.