The number of Real Estate Investment Trusts (REITs) in Asia is expected to swell over the coming 3 to 4 years according to HSBC because of increasing demand for investments in more risk disinclined properties.
REITs invest in commercial properties mainly and pay rent collected from their properties to shareholders as dividend. This is why some investors see them as safer investments than property stocks.
Another advantage is that they usually offer returns that are higher than yields of government bonds.
The increased activity in the REIT IPO market this year especially in the Asian continent is due to successful listing of Cache Logistics Trust in Singapore. Also Sunway City plans to list its REIT in Malaysia come July.
At the Reuters Global Real Estate and Infrastructure Summit which was held today, Managing Director and Head of Real Estate Advisory for Asia Pacific at HSBC, Mr. Jason Kern had to say,
“I see proliferation of REITs, absolutely. I think we’ll have twice as many REITs in Asia as we do today in the next three or four years.”
He anticipates Singapore to witness most of the activity with more than 20 to be listed there in the coming years from companies all across Asia. It already has more than 20 listed REITs such as Fortune, Saizen from Hong Kong and Ascends from India. Australia and Malaysia are also showing growth patterns.
Kern further added, “What I find in my space is that investors are more risk-averse for sure. They are more defensive. We actually still find very strong demand at the most defensive end of the spectrum, which are the REITS.”
This Trend is only to bring fortune to our Country as well.
Two real estate deals in India — the sale of Leela Kempinski Kovalam and Noida’s deal with Wave Mega City Centre – have been ranked among the top ten in their categories across Asia according to a recently published study by Real Capital. Both deals took place in August 2011.
Real Capital tracks and analyses real estate deals worth over $10 million across apartments, hotels, retail, industrial, office and development projects over the world. The Purchase of Leela Kovalam by Saudi Arabia-based industrialist Ravi Pillai, which was pegged at about Rs 500 crore ranked 10th in Asia-list of largest hotel sellers.
Bangalore and Mumbai have been named among the most active Asian markets in the office space.
Delhi was ranked sixth and Mumbai eighth in the most active Asian apartment markets. Tokyo tops the list followed by Singapore, Hong Kong, Osaka and Beijing. While Chennai comes in at eighth position among active hotel markets, India did not rank in the big league when it comes to retail deals.
While Dubai remains a hot and one of the favourite destinations of Bollywood. It has definitely fascinated other strata of India as well.
As per the Dubai real estate data, No other national has purchased property to the tune Indians have in 2011.
Indians have topped the list of first-time property buyers in Dubai in 2011, having bought properties worth 2.1 billion dirhams (Rs 292 crore), Dubai Land Department data has revealed.
The Indians topped the list of new investors in Dubai properties and conducted 927 transactions worth 2.1 billion dirhams. This represents 16 per cent of the overall value of transactions carried out by new investors,” the department said.
While it did not mention the nationality of the second largest investors, the department said the UAE nationals came third, having invested 1.575 billion dirhams (Rs 219 crore).
According to the department the new money flowing into the Dubai property market last year totalled 13.13 billion dirhams (Rs 1,825 crore).
Meanwhile, Asian investors formed 68 per cent of the overall number of investors in the sector, with the UAE nationals topping the list with 35 per cent representation of the overall number of Asian landlords, followed by Indians at 20 per cent.
The CEO and country head of CapitaMalls Asia, Singapore-based develops, owns and manages malls across Asia, will invest INR 1,800 cr in India. He also said, “apart from funding the two malls that are operational now, this money would be also used to develop 07 another malls in India.” The company has put-on 02 joint ventures in India, with Bangalore-based Prestige Estate Projects Ltd for projects in the South and with Advanced India Projects Ltd for projects in the North.
The ventures now own the Forum Value Mall in Bangalore which was opened in 2009 and The Celebration Mall in Udaipur, early this year. The other committed projects in India are under different stages of development in Bangalore, Mangalore, Hyderabad, Mysore, Kochi, Jalandhar and Nagpur. These malls are scheduled to be operational between end-2012 and mid-2013.