Home > Commercial Real Estate News, Investment > #CRE : Asian Property Market Moving Into The Black -VIA Seeking Alpha

#CRE : Asian Property Market Moving Into The Black -VIA Seeking Alpha


Asian Property Market Moving Into The Black – Seeking Alpha.

A report from last week noting that private equity giant Blackstone (BX) was moving towards offering a pan-Asian property fund underscored the data that I’ve been collecting from around the region that suggests that bottoms are forming in certain markets. The stunning turnaround on the Hang Seng from the June low – which has it up 22.5% in less than 6 months -is strongly stating the power of global, coordinated quantitative easing. And since Hong Kong pegs their Dollar to the U.S. Dollar- similarly to Singapore – via manipulating interest rates, this is part of the reason why both the Hong Kong and Singapore REIT markets have done so well in the past 18 months. There is simply more money chasing the same amount of property.

It is the Federal Reserve’s ZIR (zero-interest rate) policy that has made these two Asian tigers very attractive places to park investment funds in anticipation of the economic growth that will have Asia Pacific at its epicenter. Low carrying costs of properties in two of the world’s most dynamic cities which will form two corners of the Asian financial triangle in the coming years – Shanghai being the third – has caused tremendous growth in prices and, by extension, occupancy rates. The result is the Hang Seng REIT Index is up 39.4% in 2012. The FTSE Straits Times REIT Index which covers Singapore REITs has climbed 33.4% this year.(click on link for the full story Asian Property Market Moving Into The Black – Seeking Alpha.)

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