ASIA HAS LONG been in love with property. After the early Chinese traders had made their first fortunes, they promptly made second ones buying property. From the wharves and go-downs of Hong Kong and Singapore to the shiny office towers and air-conditioned shopping malls that grace any major Asian city, local entrepreneurs have grown wealthy on the asset inflation gleaned from bricks and mortar.
If bankers and analysts are right, Asia now stands on the threshold of another property boom, this time courtesy of the capital markets. As governments, listed conglomerates and public and private property companies continue to shift assets from their balance sheets into listed investment vehicles – real estate investment trusts – investors and sellers alike stand to benefit. Investors get greater choice and diversity of investment from Reits, and companies are able to shift developed assets into vehicles that value them more highly and recycle capital into new projects that will provide a continuous pipeline for new Reits, say property bulls.
“We have huge growth markets here,” says the head of property at an investment bank. “There are some great businesses here with great execution and a lack of capital.