Commercial & Industrial Property News Update

Asia Pacific - Singapore And Japan REITs Most Active Purchasers


August 31, 2012

Asian REITs investment turnover increased to 22% for the first half of the year, said CBRE.


Asian REITs are on an upward trend, said CBRE in its latest Asia REIT ViewPoint report. For H1 2012, there was an increase of 22% in total investment turnover, compared to only 11% in 2009.

In the past two years, REITs in Asia have recovered amidst a troubled macro-economic backdrop. The investment channels have furnished high dividend yields and steady revenue growth even as Europe and US continued to lag behind.

However, Asian REITs have suffered from a decline in purchases for the first half of the year of up to USD 7 billion across the region, dragged down by a weaker outlook as well as the debt crisis in the eurozone. The decline represents a 14% drop from H2 2011.

Director for Singapore and South East Asia at CBRE Research Petra Blazkova said that Japan and Singapore accounted for the highest number of purchases during the period.

"Japanese and Singaporean REITs have been the most active purchasers, accounting for 53% and 33% respectively of acquisitions completed by Asian REITs since 2009."

The Japanese REIT market was spurred by Bank of Japan's April extension to JPY 10 billion for its Asset Purchase Program. As a result, Japanese REITs have been active throughout H1 2012.

Meanwhile, Singapore REITs were more selective in domestic acquisitions which offered lower returns, preferring to focus on real estate outside of the country for their higher yields.

Danny Mohr, Executive Director at International Valuation, Asia said, "Although the demand for REIT stock improved over the past two years, dividend yields were often still higher than selling yields at a real estate level. Hence, managers have focused on portfolio enhancement and value-added opportunities within their portfolios."

Tags: Commercial real estate, Income properties

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