Asia-Pacific underpinning commercial real estate growth
The Asia-Pacific region has been a strong driver of global commercial real estate growth, but the US market is on an uneven road to recovery, according to a Deloitte report on the outlook for 2012.
Deloitte Australia real estate partner Alex Collinson said the Asia-Pacific has had the largest share of global real estate transactions since 2009, which was due to the relatively faster growth of Asian economies since the global financial crisis.
The US commercial real estate market continues to face macroeconomic problems as the country's economic recovery appears to be stalling, according to the report.
However, real estate investment trusts (REITs) in the US and the Asia-Pacific have outperformed other asset classes because they have simplified their structures, reduced gearing and undertaken capital management initiatives, said Collinson.
"Confidence is beginning to return to the sector, with REITs still trading at a discount to their net tangible assets, however, management is undertaking capital management initiatives to improve investor returns," he said.
However, the sovereign debt crisis in Europe and its affect on financing in Australia could lead to a reduction in REIT transactional volumes, Collinson added.
Finance for real estate development continues to be hard to source, with lending institutions maintaining tight underwriting standards, he said.
"Australia has been seen as a proxy to Asia for offshore investors who want exposure to the growth in the Asia-Pacific region and recognise the transparency of the Australian real estate market," Collinson said.
Recommended for you
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
L1 Capital, which is in talks to merge with Platinum Asset Management, has indicated it will be voting against a deal to convert a Platinum LIC into an ETF.
Evidentia Group has hired a head of quantitative investments who joins the investment firm and managed account provider from AMP.
