The Asian Public Real Estate Association (Aprea), which represents and promotes the real estate sector across the Asia-Pacific region, recently held its annual property forum to discuss the current issues and challenges facing the industry. Over 175 of the real estate industry's most senior people from 19 countries attended the event in Hong Kong.
At that annual gathering, consensus was reached on a few points, including that Asia is in better shape than the rest of the world and liquidity still exists, although most investors are adopting a wait-and-see attitude for good opportunities.
The group also believes that appetite still exists in the real estate sector, with most funds intending to increase their allocation to this asset class, with a bias towards listed companies for liquidity and valuation considerations.
Consensus was also reached on these points: distressed opportunities appear to be hard to come by or are practically non-existent in most Asian markets; while Asia was not spared from the subprime crisis, its exposure has been limited compared to its Western counterparts; deleveraging has been happening in earnest in the property sector and has led to tremendous pressure on Asian Reits; emerging markets seem to be holding up with fundamentals generally sound and pockets of opportunities still existing; Asian companies seem to be not too far behind in adopting sustainability practices and building these into their company culture and business models; China continues to be an area of opportunity with a huge market and liquidity still existing in the system; and, sharia-compliant or Islamic financing has become a big source of funding and can be applied to real estate investments, opening up or expanding opportunities not only for Middle East-based investors but also others.
"It is clear that these are tough and challenging times for our industry," says Jamie Ysmael, president of Aprea and senior vice-president and CFO of Ayala Land. "However, times of crisis are also times of opportunity."
Aprea is a non-profit industry association that works to encourage greater investment in the real estate sector in Asia through the provision of better information to investors, improving the general operating environment, encouraging best practices and unifying and strengthening the industry. Aprea has continued with its efforts to raise the standards of the industry through the provision of practical and applied education and training programmes.