A newly launched global property index covering commercial real estate sees Asia-Pacific markets as more attractive than those in Europe but below the United States.
The Fair Value Index as it is called is compiled by property consultancy DTZ and offers investors an insight into the relative attractiveness of global markets over a five-year investment period.
Asia-Pacific scored 67 on the index in the second quarter, outstripping the global score of 62 and ahead of Europe on 49 but lagging behind the US at 89.
A score above 50 indicates a hot market – one attractive to investors as expected returns exceed risk-adjusted required returns. Below 50 means a market is cold.
David Green-Morgan, DTZ’s head of Asia Pacific research, said that Hong Kong, Singapore and Tokyo offer some of the most attractive opportunities across office, retail and industrial property.
‘Hong Kong and Singapore, two traditionally volatile markets, are set to record strong rental growth, particularly in the office sector, over the next five years as they rebound from sharp falls in rents in 2009,’ he said. ‘This will result in strong capital growth, boosting returns for investors, and places both markets in the hot category across the board.’