Pursuing Performance: A compelling case for Asian real estate

(SINGAPORE/HONG KONG) – Hines, a global real estate investment manager, has today released a new “Why Asia Now” research paper. The study finds that an allocation to developed Asia real estate can help boost risk-adjusted returns and reduce downside volatility for global institutional investors, even when currency effects are considered.

Based on Hines’ proprietary research, the study articulates Asia’s positive growth outlook, the region’s depth of opportunity across asset classes, and where Asia currently presents attractive entry points.

“Fundamentals in Asia are pointing in a positive direction,” said Chiang Ling Ng, chief investment officer, Asia at Hines. “Because of the region’s secular growth trends and unique in-market dynamics, we see Asia poised to generate a spectrum of opportunities.”

The region’s real estate investment prospects include core plus and value add opportunities in office, residential, industrial and logistics, and retail, driven by Asia’s population growth and healthy labour markets. Its real estate also stands to benefit from potentially higher-for-longer inflation, given the historical correlation between inflation and rental growth.

Economies in Asia have also become increasingly self-reliant, intra-regionally driven, and wealthier, the study finds, with the region projected to grow at double the rate of the United States and Europe annually over the coming years.[1]

“You can call Asia the ‘growth stock’ in a global real estate market portfolio,” said Tim Jowett, head of research, Asia at Hines. “As the region continues to grow and urbanize, we project its total value and share of investible real estate to also grow, reaching a point where Asia comprises the largest share globally. This will help create tremendous opportunities for investors. So, we’re very optimistic about Asia.”

According to the study, intra-regional diversification supports a more stable return profile given the meaningful differences in monetary policies, interest rates, and real estate fundamentals across Asia. As a result, individual markets are not highly correlated, allowing investors to benefit from diversification.

“With Asia’s diversity comes a deep but complex set of opportunities,” said Ng. “Capturing them requires local expertise to identify the right real estate, access attractive deals, and create value at the individual asset level.”

The “Why Asia Now” research paper is available for download on the Hines website.

About Hines

Hines is a leading global real estate investment manager. We own and operate $93.2 billion[2] of assets across property types and on behalf of a diverse group of institutional and private wealth clients. Every day, our 5,000 employees in 30 countries draw on our 65-year history to build the world forward by investing in, developing, and managing some of the world’s best real estate. To learn more, visit www.hines.com and follow @Hines on social media.

[1] This is based on Oxford Economics data as of 27 March 2024.
[2] Includes both the global Hines organization and RIA AUM as of December 31, 2023.