Why does the Asia-Pacific region remain a resilient and compelling investment destination? Our research paper ‘The days are long but the years are short, co-authored by Shaowei Toh and Hannah Cho explores current macro dymanics, evolving capital market conditions, and where we see structural and tactical opportunities emerging.
- Resilient macro backdrop: The developed Asia-Pacific region remains a compelling proposition, where domestic demand remains resilient, unemployment is low, and policy flexibility exists to cushion external shocks.
- Near term concerns are abating: Bid-ask spreads are still wide, hindering price discovery, but rate normalisation cycle is already underway. The perceived lag in pace of repricing is a display of occupier resilience in most of APAC markets.
- Capital markets: There are signs that animal spirits are returning – Asia-Pacific real estate is well placed for a recovery in capital flows and transaction activity, largely focused around Australia, Japan and South Korea.
- Investment opportunities: The living sectors in Japan (Institutional multifamily) and Australia (Build to rent & PBSA) are structural opportunities; There are tactical windows around Australia essential retail, and value-add opportunities in the Japan commercial property space, particularly in the office and multifamily segments.
- Look through the cyclical noise: Real estate is inherently a longer-duration asset class, while political and macroeconomic disruptions are often cyclical and transient. Investors need to focus on structural convictions, asset selection and active management, as passive approaches will not suffice in a complex and uneven market.