Topical research covers both in-house and external publication on a range of topics which drives the direction of the commercial real estate industry, intending to give insights to the trends and opportunities across Asia Pacific.
The Red Paper series consists of research papers prepared by the market-leading fund managers, investors and commercial real estate service providers. Each paper provides an in-depth analysis and thought leadership on a specific key issue or sector, offering the leading edge of current thinking and guidance on effective investment decision-making.
In light of the COVID-19 pandemic, ANREV has conducted two additional surveys investigating market sentiment and funds’ valuations under COVID-19.
The market sentiment survey targeted senior investors and investment managers and asked their views on the impacts of the pandemic on Asia Pacific markets.
The ‘Impact of COVID-19 on valuations’ survey was distributed to fund managers during the data collection of ANREV Quarterly Index Q2 2020. The manager were asked to fill in this extra questionnaire to look into the impact of the “Material Uncertainty clause” on assets’ valuations, suspension of trading and status of rent collection.
The snapshot summarising the findings of the 'market sentiment' and ‘Impact of COVID-19 on valuations’ surveys can be downloaded here.
In light of the COVID-19 pandemic, ANREV has surveyed the fund mangers who are currently included in the ANREV Quarterly Index and asked about the impact of COVID-19 on valuation, suspension, and rent collection.
The survey covered 78% or US$97.5 billion GAV of the ANREV Quarterly Index Q1 2020. A snapshot summaring the results can be downloaded below.
In light of the COVID-19 pandemic, ANREV has conducted a small survey to assess sentiment across the region in terms of confidence on the allocations, markets and sectors, as well as impacts on the workplace. The market sentiment survey targeted senior investors and investment managers members of ANREV Management Board and councils and asked their views on the impact of the pandemic on Asia Pacific markets.
A snapshot summarising the results of the survey can be downloaded below.
Investors with private capital allocations assign considerable resources to forecast future capital calls which is an act of necessity rather than choice. The challenge for LPs is to estimate the amount required and schedule of calls to meet their commitments. Committed capital today is unlikely to be called in immediately. GPs may postpone drawdowns with anticipation that asset price will adjust or be in a search for acquisitions that match vehicle strategy.
In this paper, Arvydas Jadevicius PHD, assesses the typical capital calls velocity for closed end APAC non-listed real estate funds. The study contributes to a better understanding of capital calls velocity. It can also enrich LPs’ non-listed APAC real estate funds investment programme.
Despite the buzz-worthy nature of its nomenclature, co-living is not a new trend, but merely the re-envisioning of an old one. A living environment whereby tenants share resources and space in exchange for lower costs and cultural commonalities harkens back to socially-minded communes of the 1960’s, and further still to the boarding houses of the 19th Century.
In this paper, Unger and Tan from Invesco talked about the current landscape of the co-living market, and discussed its investment opportunities and implications to the real estate industry.
Each year, LaSalle estimates the total value of investable commercial real estate and its global distribution. The estimates establish a baseline for the market size of real estate in each country and can help fund managers and investors assess their relative allocations. The relevant investment universe differs by investor type and objectives, and the estimates reflect these differences by breaking the real estate universe into three segments: total investable commercial real estate market size, institutionally-owned, and public.
All three of LaSalle’s estimates increased in the 2018 estimation. Institutionally-owned real estate grew 9% last year, powered mainly by strong price appreciation in Asia Pacific and Continental Europe. LaSalle estimates that institutions own about one-fifth of all investable commercial real estate. The public real estate universe, which is based on our gross asset value estimates rather than market capitalization, only grew 3%. Privatization and delisting activities roughly balanced initial public offering (IPO) activities, but underlying asset appreciation was slower. Public companies own 44% of all institutional-owned real estate, which is down slightly from the 2017 estimation.
• The nascent signs of a new economic pattern marked by higher interest rates and increased inflation has begun to show. This
“reflation” environment will have direct implication for U.S. property markets and the economy as a whole.
• Commercial property has long been considered to be an asset class that provides some degree of protection from the pernicious
effects of inflation, and historically, in rising interest rate environments, investors have been willing to allow the yield spread to
compress for some period of time.
• Property sector performance is likely to reflect underlying property market fundamentals more than capital market changes as long as
the economic and property market fundamentals do not change significantly.
• A panel data regression analysis was undertaken on a unique, unbalanced panel of APAC non-listed real estate funds to determine the role of leverage in hedging against actual and unexpected inflation with a focus on core funds.
• There is evidence that APAC non-listed real estate funds provide hedging against inflation and that the use of debt enhances their hedging capabilities.
• Furthermore, the results show that while leverage enhances a fund’s inflation hedging capability at moderate levels, its benefits are not unrestricted.
• The results imply that investors can extract information about inflation hedging abilities of non-listed real estate funds from capital structure data, promoting efficient investment decisions.
• The significance of the results may be influenced by the size of the dataset (119 APAC non-listed real estate funds invested in more than 10 countries across the three styles over the period of 2006-2014).
The number of foreign visitors to Japan has been surging. In CY2015, it reached 19.74 million, just shy of 20 million, the official target set by Japanese government to be achieved in 2020. The total number of rooms at accommodation facilities has remained almost the same for the past 20 years. Nowadays, the shortage of accommodation has become an urgent issue, and many players, both existing and new comers, see as a big business opportunity.
In this report, we provide an overview of the current hotel market conditions in Japan, and examine the actual transactions made by the
APAC is home to three of the world’s four most populous nations (China, India and Indonesia) and growing rapidly. Prior to the global financial crisis offshore investors mostly pursued high risk property investments to capture the tremendous growth of the region. However, many investors achieved disappointing returns due to an underestimation of property investing risk within Asia’s emerging markets. However, we see a structural decline in investing risk within APAC’s high-income economies which is attracting low-risk overseas investors to the region; they are allocating capital to diversify as well as to potentially achieve higher returns than are available in their home market.
This paper outlines Asia Pacific’s investment landscape in terms of its historic return performance, its risk characteristics, and the size of the institutional property universe. We believe APAC’s high-income markets are a low risk means of accessing the growth of its emerging markets, as they urbanise and experience a catch-up in incomes with the industrialised west.