According to “Emerging Trends in Real Estate Asia Pacific 2008,” just published by the Urban Land Institute (ULI) and PricewaterhouseCoopers LLP, Shanghai, Singapore and Tokyo rank as the three most promising Asia Pacific cities in terms of real estate investment prospects.
David Sandison, a Tax Partner with PricewaterhouseCoopers in Singapore said, “It is expected that even greater amounts of capital will be flooding Asia Pacific real estate markets in 2008. The real challenge for investors will lie in finding the right assets against the backdrop of yield compression and scrutiny by regional governments and tax authorities.”
Shanghai topped the list for investment prospects, edged up from its second-place ranking last year. Singapore received the highest rating of any of the cities included in the report in terms of overall risk.
Singapore is “certainly one of the markets in the area that provides a very stable legal and tax environment, and property rights that are beyond question. And it therefore is certainly one of the markets where many, especially Westerners, are very comfortable,” said one of the respondents.
Tokyo was cited as presenting very low overall risk as an investment market. Characterized by survey respondents as a city with a tight inventory supply and low vacancy rates.
The Asia Pacific cities included in “Emerging Trends” fall into different categories, based on each market’s investment and development prospects, and on respondents’ opinions about buying, holding or selling specific property types within each market. In the first category are the top five investment cities “this group includes Osaka, and Hong Kong, in fourth an fifth place respectively. All are listed as cities in which to hold or buy most property types. In the second category are the strong development markets: Ho Chi Minh City, in first place, followed by Shanghai, Singapore, Bangalore and Mumbai. Compared to last year, the report notes a stronger correlation in this year’s survey between the prospects leading to a high rating for investment versus a high rating for development. Numerous interviewees pointed to the declining imbalance between the supply of and demand for investment properties. As a result, more respondents are investigating development opportunities in top-ranked investment markets, the report says. “Due to the limited number of investment properties available, riskier development projects will continue to be popular,” said an interviewee.
ULI is a nonprofit education and research institute supported by its members. The Institute has more than 38,000 members representing all aspects of land use and development disciplines.
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The map at the top is courtesy of the CIA. Thanks guys, it’s nice to know you could find China if you had too.