RCA in the commercial property press:

Survey Says Top Property Pick in 2010 is Developing Asia

Reuters reports: Property investors are most bullish about developing Asian markets next year, as concerns of a second pricing dip across debt-drenched mature markets crimp returns expectations in 2010, a Thomson Reuters survey showed.

Some 85% of the 150-strong audience at the annual Thomson Reuters Global Property Outlook said they expected developing Asian markets like China to deliver total returns in excess of 10% next year as economic growth feeds demand for homes, shops and offices.

In contrast, just 13% of those delegates surveyed said UK or US 2010 total property returns would match those seen in developing Asia, even though both markets looked to be nearing the twilight of their real estate corrections.

61% of the audience said they expected UK total returns between zero and 10% next year, broadly in line with Eurozone total property returns for the same period.

About half of respondents expected to see the same zero-to-10% total returns range in developed Asian markets like Korea and Tokyo as government measures to thwart real estate bubbles bear fruit.

Thin transaction volumes and unclear changes in pricing have damaged sentiment towards the US property market, where the volume of distressed property hit $140 billion by end-October, Real Capital Analytics data shows.

A narrow majority of 42% estimated US total property returns between negative 10% and zero, while 39% of those surveyed expected returns between zero and 10%.

Congested credit markets and reluctance among some banks to lend to real estate has encouraged bargain-hunters to delay investment sprees, and 61% of respondents said they expected a "flat" property market next year.

There was less conviction on the topic of Dubai, illustrating continued fear among property investors that the worst global real estate slump for generations was not over yet. Around half the respondents said they believed Dubai's debt crisis was a sign of further troubles to come for highly-leveraged property markets, while 37% said the problems were too small to spark a calamity outside the Gulf region.

Until valuations stabilize further and banks resolve massive exposures to distressed property loans, real estate will have to compete strongly to maintain its weighting in a diversified portfolio, the survey results indicated.

Articles related to this topic:

 Confidence Grows In Asia And Latin America Real Estate
 FDIC Moves to Stave Off Distress
 Dubai's Crazy Quilt of Assets
 Dubai Market Plunges for Third Day Amid Uncertainty
 Survey: US Property Faces Long Road to Recovery
 Low Realty Prices Will Attract Foreign Investment To GCC
 Asia Pacific’s Major Markets’ Strain
 Deals Few And Far Between

Posted by: Matthew Stone

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