12 agosto 2008

"As part of the "Property Management Trends" series, DEGI, a company of Aberdeen Property Investors, in Frankfurt today unveiled a comprehensive analysis of the Southeast Asian property markets and their investment opportunities. The motif for this groundbreaking work is obvious: Asia is an increasingly popular focus for international property investors. "But this demand is not matched by any commensurate amount of soundly based data material permitting adequate risk assessment", explains Dr. Thomas Beyerle, Head of Research at DEGI. Together with his team, he has examined the up-and-coming property markets in Vietnam, Thailand, Malaysia and additionally Singapore . Besides a purely economic analysis of the countries and locations concerned, one of the study’s major focuses is to identify and delimit development locations and their property parameters. One salient characteristic of up-and-coming property markets, in particular, is a shift in the top locations, meaning that the sustainability of investments is not always guaranteed.

This research-based approach to investments proves necessary insofar as (with the exception of Singapore) hardly any stable property market structures have so far developed in the countries studied. True, the prospects for the future and the few documented investments are impressive in terms of both size and volume but all the classical market parameters indicate a very high risk component, and frequently reveal NIC character. In other words: the returns, at an average of 7.1 % at the various locations, are thus also almost 2 % above the figures for Frankfurt or London, and are looking stable. Nor are any lastingly adverse effects yet to be anticipated from the emergent subprime crisis, say the analysts at DEGI.


In contrast to the situation in Germany, REITs are an established investment category in the Southeast Asian region, with an investment volume of US$ 21 bn so far. Security-focused investors looking for minimised risk levels and a low proportion of outside financing, known as core investors, have so far tended to constitute the exception in this region. When the key data for the property market are analysed, like rental increases, turnover trends and vacancy ratio reduction, these are set to continue auspicious up to 2009. "However, in 2010 we are expecting a significant rise in the vacancy ratios, coupled with a further reduction in returns", explains Beyerle. At this juncture, too, in mathematical terms more properties will be completed than in the entire 7 previous years.

The researchers continue to assess area absorption as positive, although some initial investment locations, such as Bangkok, are currently in a market downturn phase. In terms of market maturity and rental development, the locations exhibit a high positive correlation of 0.97 overall, but Singapore and Ho Chi Minh City, for example, define disparate stages of development. In 2006 and 2007, rental growth of between 60 % and 70 % was achieved in both markets, which in Ho Chi Minh City led to peak rentals of up to USD 85 per m²/month, unmatched by many well-established European locations.

It remains to stress that the Southeast Asian region’s enormous dynamism is truly impressive, and that investment opportunities will increasingly emerge in the property markets involved. But in the growth markets studied, particularly, due to the lack of transparency and to both political and legal uncertainties, a heightened risk remains for sustained investments". (CS della Società)