Asia is next year expected to offer investors the greatest range of investment opportunities in 2010, as China and India grow rapidly and economies that have experienced a “contraction in economic output” reclaim lost ground, according to LaSalle Investment Management.
In its Investment Strategy Annual, which provides an outlook for the global real estate markets in 2010, the Chicago-based firm pointed to improving real estate “fundamentals” and wider economies across benefiting central business districts across Asia Pacific, and a positive shift in consumer spending in China and its neighboring countries, as among the reasons.
This coincides with IMF figures in October which pegged China’s gross domestic product to grow by 9 percent and India, by 6.4 percent.
Kenneth Tsang, head of Asia Pacific Strategy at LaSalle said added to this, the presence of distressed real estate owners and lenders, like elsewhere in the world, coupled with this growth, will provide: “a wide range of opportunities in 2010.”
He said: “Opportunistic investors can take advantage of off-market deals where “rescue capital” is needed to recapitalize a financially-troubled project or to finance a cash-strapped developer.”
According to LaSalle, the window of opportunity in the UK, however, has passed. Jacques Gordon, global strategist at LaSalle, said: “In the UK…LaSalle notes the sharp rebound in prices and says that, while capital values will still increase, it is now clear that the best opportunities in the UK have passed.”
This coincides with a reticence among UK pension funds to invest in real estate. According to research released at the end of November by the National Association of Pension Funds, the overall amount of capital allocated to real estate halved to 3.9 percent in 2009 from 7 percent in 2008.
He added that elsewhere in Europe, the investment markets are varying at different speeds, with France and Germany on course to provide the best opportunities. Gordon added that Central and Eastern Europe would remain “paralysed”.
LaSalle predicted opportunities in the North America would improve but remain “limited” in 2010, particularly in the US and Mexico. William Maher, head of strategy for LaSalle in the US said the best opportunities in the US would emanate from the “resolution of the large level of maturing and failing loans.” The report recommended a focus b y US investors on “low-risk re-priced core properties”.