DTZ says Asia Pacific commercial properties offer attractive returns

Asia Pacific commercial properties are offering attractive returns to investors based on current pricing in global property markets.

That’s according to the Asia-Pacific all-property DTZ Fair Value Index which was launched in Asia on Thursday.

DTZ said the Index offers investors insight into the relative attractiveness of current pricing in global commercial property markets.

An Index score above 50 indicates there are more markets categorised as ‘hot’ than ‘cold’.

That means markets that are attractive to investors as expected returns exceed risk-adjusted required returns.

The Asia Pacific region hit a score of 67 in the second quarter this year which implies that commercial property markets in this region are generally offering attractive returns to investors buying into the market now.

While the office sector in Asia Pacific is leading the way with a score of 70, all three sectors are currently offering opportunities to investors with scores above 50.

The retail sector is performing in line with the regional average at 67, while industrial stands at 61.

The score is almost double what it was a year ago, implying the investment landscape has improved considerably in the last 12 months, marked by recovery in economic growth across the region, improved liquidity and occupational demand.

DTZ said the attractive pricing in many markets is seeing an increased number of buyers who are encouraged by occupational resilience and the resumption of rental and capital value growth.

Over half of the markets in Asia Pacific are categorised as ‘hot’ with the core office markets of Hong Kong, Tokyo and Singapore remaining in the top five markets in Asia Pacific.

Most mainland China markets continue to offer good value, but the Guangzhou and Shenzhen office, as well as Shanghai retail markets, are priced above fair value and therefore classified as ‘cold’.

In Australia, opportunities in offices and industrial markets are most attractive, while retail markets are also ‘warm’.

Elsewhere, the Delhi retail and Bangalore office and retail markets are the top ranked Indian markets.

Source : Channel NewsAsia – 19 Aug 2010

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