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Overview

Asia Pacific stock markets endured another tepid month in May as investors remained focused on rising inflationary pressures, as a surge in commodity prices threatens to drive up inflation. The region also contended with a fresh wave of Covid-19 infections across several countries including India, Japan and parts of Southeast Asia. A spike in caseloads in Singapore, Taiwan and Vietnam, which had the most success in curbing infection levels, also unnerved investors. Vaccine rollouts, at rates lagging those worldwide are compounding concerns that protracted border controls will delay an economic recovery. Property stocks across the region reacted by underperforming both the region’s equity and bond indices.

Listed Real Estate

The GPR/APREA Listed Real Estate Composite barely remained in positive territory, with marginal gains in Australia, Hong Kong and Japan just managing to offset declines in the other regional heavyweights of China and Singapore. China real estate stocks slipped, after a meeting held in Beijing contemplated a property tax to rein in rampant speculation in the housing market dragged on sentiment.

However, Hong Kong shares closed higher for a second month in a row as investors bought into the strong Chinese currency and the US Federal Reserve’s commitment towards monetary accommodation. Despite grappling with the world’s highest infection caseload, India stocks scored the highest returns as the merger of Indiabulls Real Estate and Embassy Group gained momentum. Regulatory pathways cleared for the merger will create one of India’s largest listed real estate companies.

REITs

The GPR/APREA Composite REIT Index held on to record another positive month in May. However, most REIT markets in the Asia Pacific underperformed equities. Hong Kong was the exception, clocking the highest returns at just over 3%. Sector-wise, gains were also tepid across the main property segments. S-REITs were among the underperformers in the region, as the country heightened restrictions over the increase in infections. Nonetheless, industrial S-REITs continue to increase their assets under management, with significant acquisitions valued at over S$5 billion announced this year.

A significant development also greeted REIT markets in the region. China’s long-awaited public REITs market kicked off, after regulators approved the first batch of its REITs, comprising nine stocks that will raise an estimated RMB30 billion for infrastructure projects. However,  unlike other markets, Chinese REITs are only backed by infrastructure. For now, eligible underlying assets do not include commercial properties such as shopping malls or offices. Meanwhile, Hong Kong saw its first logistics-focused REIT list, after SF REIT successfully debuted on the territory’s stock exchange.

The region is also experiencing heightened M&A activity in the REIT space. In addition to the current tussle for Invesco Office J-REIT in Japan, ASX-listed Australian Unity Healthcare Property Trust has also been the target of a takeover bid by Canada’s NorthWest Healthcare Properties REIT and Singapore sovereign wealth fund, GIC.

Outlook

As rising resource prices and escalating shipping costs heighten the possibility of an earlier-than-expected policy rate hike, inflation will continue to be a dominant theme for investors. However, treasury yields have retreated in May, after the Fed commented that such price spikes, that stem from base effects, will be transitory. Investors are buying into the view that the Fed will tolerate higher prices before hiking rates and tapering bond purchases. Amid the ongoing economic recovery, Asia Pacific REITs will continue to benefit from the sustained low interest rate environment and strong demand for real estate investments among institutional buyers.

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概览

再通胀交易在第一季度实现快速增长后，而今却由于美国失业救济申请人数意外激增，从而陷入停滞。新一波的疫情浪潮，尤其是在亚洲，也促使投资者转向避险资产，导致4月份10年期国债收益率短暂跌至一个多月来的最低点。美联储在本月底的定期会议上决定维持利率不变。尽管经济正在复苏，美联储仍然重申在未来短期内，将继续推行高度宽松的货币政策。亚太股票市场反应乐观，继上月下跌后，摩根士丹利亚太股价指数已重回正值。

亚太上市房地产公司股票

尽管GPR/APREA上市房地产综合指数仍处于正值，但由于中国和日本权重股的下跌，综合指数涨幅并不显著。其中，中国股市跌幅最大，由于数据显示房产价格仍在持续上涨，因此，投资者担忧监管将施加更大的压力。中国许多城市3月新房房价增速都达到了过去7个月来的最高点。距离奥运会只剩三个月，日本宣布进入第三轮紧急状态，以抑制疫情发展，而这也打击了日本国内的市场信心。

亚太REITs

大部分亚太市场表现良好，GPR/APREA综合房地产投资信托指数延续了2月以来的涨势，本月月底收高。亚太REITs连续第二个月跑赢股票。

其中，日本REITs引领涨幅，保持2020年11月以来的连胜势头，因为机构对日本房地产资产的兴趣增加，从而推动了REITs的表现。喜达屋资本拟计划收购日本景顺资产管理公司的REIT，初始报价即溢价超10%。预期未来报价将上涨，投资者竞相抬价抢购。此外，日本央行承诺每年继续拨出高达1800亿日元的资金购买日本REITs。低利率和对经济复苏的预期也给澳大利亚市场带来了信心，收益上涨。

同时，巴基斯坦证券与交易委员会，即该国的市场监管机构，正在逐步放松对REIT的监管，取消对提供竣工证明文件的强制性要求，该要求被许多投资者认为阻碍了REIT的发展。继2015年上市首支REIT后，这个南亚国家还未推出任何新的REITs。

亚太REITs行业正处于持续扩张中。中国最大的快递供应商，顺丰控股有限公司，计划将三个总价值61亿港币的物流中心纳入到一个在香港上市的离岸REIT中。顺丰已在4月向香港交易所提供了顺丰REIT的上市申请。地产开发商和管理公司丰树投资也计划在新加坡上市学生住房类REIT，预计能筹资约10亿新元。

前景展望

距离疫情爆发已一年有余，亚太REITs已逆转颓势，超过了去年1月份疫情爆发前的最高点。然而，在收益方面仍然不如亚太股票。

至于未来，疫情再度爆发的压力与通胀都为市场前景蒙上了阴影。尽管如此，后疫情时代的经济复苏仍将逐步提速，这将对亚太REITs带来积极影响。在当前的低利率环境下，机构投资者对房产资产的兴趣不减，而在他们的带动下，商业房地产市场也更加活跃，预计这也将有利于REITs的估值。

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The global economic disruption and uncertainty in capital markets caused by the COVID pandemic has done little to negatively impact the Real Assets sector; in fact, it has emerged as a haven for institutional investors seeking opportunities amid the turmoil.

A recent Investment Intentions 2021 survey from PREA, INREV and ANREV, which included 84 institutional investors and 15 Fund-of-Fund managers, highlighted that COVID has not decreased but increased investors’ appetite for real estate. Almost half (46%) of the institutional investors surveyed expect their real allocations to increase over the next two years - with Sydney, Melbourne and Tokyo as preferred investment locations - while only 7% expect it to decrease.

In addition, Preqin expects global AUM growth in alternative assets to average 9.8% per year from $10.7tn in 2020 to $17tn in 2025, despite a turbulent 2020 and start to 2021.

It is clear that the current, persistently low interest rate environment in the Asia-Pacific region in particular is attracting investors to alternative assets with the promise of outperformance, diversification and lower correlation with public markets. It is also clear that managers will need to scale their administration function to cope with this influx of assets. However, what considerations do Asia-Pacific managers need to take on board – such as the potential reputational impact of sourcing jobs overseas in a high unemployment environment – when scaling up their administration?

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Market adjustment slows

Although the market continues to correct, we note signs that the rate of adjustment is slowing.

• For the central fi ve wards (C5W), COVID-19 is still taking a toll on the market and casting a shadow over the market’s future, although the impact appears to be showing signs of alleviation. • Average Grade A offi ce market rents in the C5W fell 1.9% quarter-on-quarter (QoQ) and 5.3% year-on-year (YoY), and now stand at JPY35,762 per tsubo1 per month.

• The average Grade A offi ce vacancy rate in the C5W increased slightly by 0.2 percentage points (ppts) QoQ to 1.2% in Q1/2021.

• Average large-scale Grade B offi ce rents declined to JPY27,275 per tsubo per month – a contraction of 2.1% QoQ and 4.5% YoY.

• The average vacancy rate in the Grade B market lies at 2.2% following a loosening of 0.6ppts QoQ and 2.0ppts YoY.

• With limited supply expected this year and the next, the market should have time to adjust and recover, although secondary vacancy derived from the large supply in 2020 is a concern.

• While prime real estate is expected to hold steady, rents in poorly located and older offi ces are likely to fall, resulting in an overall market deterioration.

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