By Shabnam Muzammil:
Investors should maintain their investments but also look at other options in the region, noted a report from Pacific Star Group.
It highlighted factors that are likely to boost interest in Asia, including the rapid development of gaming tourism, the rise of Iskandar Malaysia and structural shifts in the regional production model.
In particular, Southeast Asian economies are expected to attract more investment as Europe’s sovereign debt crisis stabilises and economic conditions pick up in the US and China.
“We favour the fast growing economies of Southeast Asia given the state of their healthy domestic demand and the region’s progression towards the ASEAN Economic Community. High-yield investments are still predominantly found in Southeast Asia and although the region is subject to a fair degree of political winds, the income-risk trade off is certainly improving,” said Lam Chern Woon, Vice President of Research and Strategic Planning at Pacific Star.
The spread of luxury casino resorts in South Korea, Philippines, Vietnam and Cambodia will add to Asia’s rapidly growing tourism sector, with plans also underway to legalise casinos in Taiwan and Japan.
Meanwhile, quality industrial/logistics sectors in China, Vietnam and Thailand are seen as favourable investment players. The report also mentioned Iskandar Malaysia’s rapid expansion, with government-backed companies and other major investors pumping in the majority of investments.
“Given these developments, we think that it is now opportune for investors to cast the net wider beyond traditional markets and sectors, while riding on Asia’s growth story. There are opportunities for investors to complement their portfolio, especially in new markets like Iskandar Malaysia, Jakarta and Manila. Investors should also continue to keep an eye on quality assets in the gateway markets of Hong Kong and Singapore, where pricing may be contained in the near term due to the rental correction,” Lam noted.
The report also picked commercial segments as more profitable than residential, which suffers from frequent cooling measures and minimal pricing growth.
For the office sector, Hong Kong, Bangkok and Singapore are seen as hotspots, while Bangkok, Jakarta and Kuala Lumpur are tops for retail. Bangkok is most favoured for residential investments.
Shabnam Muzammil, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email shabnam@propertyguru.com.sg
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