Lots of money to be made in Asian real estate: Report

Lots of money to be made in Asian real estate: Report
Workers putting finishing touches on a huge chandelier at the Solaire casino-resort in Pasay city, Metro Manila. Upscale casino resorts are expected to propel the next phase of tourism growth in Asia.

SINGAPORE - The rise of casinos in Asia and of Iskandar Malaysia are two factors that should encourage investors to keep placing their cash in high-yielding Asian real estate.

That is the assessment of Singapore-based real estate investment house Pacific Star Group in its latest report on the sector's outlook.

The firm also said structural shifts in industrial production will spur real estate growth.

Pacific Star specialises in managing funds, Reits and private equity, among other assets.

In the past 12 years, it has transacted US$12 billion (S$14.9 billion) of property deals for clients.

It said upscale casino resorts will propel the next phase of tourism growth in Asia beyond Macau and Singapore.

Multibillion-dollar integrated resorts are being planned in South Korea and the Philippines, and on a smaller scale in Vietnam and Cambodia, said the report.

Casinos could also be legalised in Japan and Taiwan.

With the rise of China, Pacific Star said the shifting production model for quality industrial and logistics sectors will present investors with interesting options.

This applies to production lines moving to inland China, Thailand and Vietnam, it said.

Iskandar Malaysia is another reason for investors to park their money in Asian real estate.

Last year, the Malaysian development received cumulative committed investments of RM106 billion (S$43 billion), 6 per cent more than its target set in 2006.

The report attributed Iskandar's success to government-backed companies, major investors, its strategic proximity to Singapore, bilateral governmental support and the active participation of developers.

Pacific Star vice-president of research and strategic planning Lam Chern Woon said: "It is now opportune for investors to cast the net wider beyond traditional markets and sectors while riding on Asia's growth story.

"There are opportunities... in new markets like Iskandar Malaysia, Jakarta and Manila."

For the office sector, Hong Kong and Singapore remain favourites for their sound political fundamentals and business competitiveness, said the report.

Mr Lam said: "Investors should also continue to keep an eye on quality assets in the gateway markets of Hong Kong and Singapore where pricing may be contained in the near term due to rental correction."

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