The GPR/APREA Asia Pacific Performance Snapshot tracks the dynamics of listed real estate securities (including REITs) across 12 Asia Pacific countries, and eight sectors over multiple time horizon.
The following asset classes are covered:
Listed real estate (including REITs): GPR/APREA Composite Index
Asia Pacific REITs outperformed the broader market in May against a backdrop of falling number of new COVID-19 cases and phased re-openings of the region’s economies. There continues to be a wide array of fiscal policy responses across the region including further subsidies to sectors most strongly impacted by social distancing policies and travel restrictions, as well as to small and medium-size enterprises (SMEs).
By sector, industrial remained the top performer, posting double-digit gains in May. By country, Australian real estate equities outperformed on the back of strong returns generated by the residential and industrial sectors.
Japan REITs led the region’s in May, mainly driven by the hotel and retail sectors. Japan's lower house of parliament approved an emergency budget that include rent subsidies for SMEs and thus bode well for the office sector. Singapore REITs were also an outperformer, buoyed by a solid performance of the industrial and retail REITs.
Australian real estate equities and REITs led the region, as retail rebounded and industrial sector remained strong. Additionally, investor sentiment has improved with the further easing of COVID-19 restrictions throughout Australia.
Singapore REITs also outperformed on the back of a rebound in hotel REITs and continued resilience in the industrial sector. Furthermore, the rally comes on the heels of the Singapore government’s announcement of a series of new measures to provide S-REITs with greater flexibility to manage their cash flows and raise funds.
China offshore REITs also performed well in April as domestic activity continued to gradually pick up. Notably, China launched a pilot scheme for REITs in the infrastructure sector on April 30, focusing on warehousing and logistics, toll roads and other transportation facilities, etc. as well as new infrastructure, national strategic emerging industrial clusters, high-tech industrial parks, and other thematic industrial parks.
Operational challenges, combined with increased concerns on a second wave of infections in Asia, continued to result in significant underperformance of hospitality, retail and residential sectors in the region. According to STR, Asia Pacific hotel occupancy decreased to 41.2% in February, while RevPAR dropped 36.5% to $44.27, albeit some improvements were reported in March in the hotel sector in China stemming from the resumption of corporate travel.
Australia was worst hit among larger markets, as its economy entered a period of “hibernation” to contain the spread of COVID-19. The Australian economy had avoided recession for almost 30 years, but in 2020 the economy will be in recession. Taiwan real estate equities and REITS were least impacted by the volatile global macro backdrop especially as it has kept the virus under control.
Industrial and healthcare sectors were the only sectors that witnessed positive one-year returns through March. Industrial stocks have benefited from the growth in ecommerce as online orders surged. Across the region, fiscal policy is working alongside monetary policy to cushion the COVID-19 blow, which should help limit downside risks.
