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The last decade was marked by an aggressive expansion of the region’s real estate markets. APREA’s Asia Pacific Market Outlook 2023: Onward and Upward held a session with REIT stakeholders on their business strategies around Covid, e-commerce, changing monetary policies, geopolitics, and new priorities (ESG) and the next set of challenges and opportunities.

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Please find below the rebalancing results for the following GPR/APREA index series, which will become effective as of 20 March 2023 (start of trading):

• GPR/APREA Investable 100 Index
• GPR/APREA Investable REIT 100 Index
• GPR/APREA Composite Index
• GPR/APREA Composite REIT Index (indicated with an asterisk)

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A recent CBRE survey of more than 500 commercial real estate professionals worldwide revealed these key findings:

• Focus on ESG Intensified in 2022: Nearly 70% of survey respondents reported a heightened focus on ESG strategies in 2022, mostly due to higher energy prices and government-imposed ESG disclosure requirements.

• Reducing Energy Consumption a Priority: Three-quarters of all respondents say that reducing energy consumption and carbon emissions is the top ESG consideration most likely to impact property value.

• Emphasis on Tenant/Employee Well-Being: More than 80% of respondents indicate that proximity to public transit (or lack thereof) impacts property value as easier commutes are associated with better employee well-being.

This report was originally published in https://www.cbre.com/insights/books/strengthening-value-through-esg

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Enough has been written about the impact of Budget 2023 on REITs and InvITs. Through this piece, Resolut Partners tries to succinctly capture the what, why, and what next of the proposed changes – keeping it germane mainly to global financial investors.

Key Takeaways:

• Distributions out of repayment of debt principal could now be taxed as ‘other income’ – at odds with global standards
• Distributions out of debt repayments through redemption of units not treated as ‘income’, but reduce cost of acquisition – InvIT / REIT Regulations do not permit redemption of units
• Major impact on IRRs as distribution structure of most InvITs factored in distributions through debt repayments
• Changes and policy ambiguity could thwart the growth of REITs / InvITs, which were just about seen as ‘bond proxies’

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