originally published here: http://www.koreaherald.co.kr/
Korea is a good option for investors who are interested in the Asian real estate market, an executive from LaSalle Investment Management said yesterday.
“The opportunity in Korea is office space, where corporate demand is strong,” David Edwards, head of the company’s Asia Pacific Research bureau, said at a press conference in Seoul.
Mentioning robust economic growth and corporate profitability in 2007, Edwards recommended that investors overweight Korea in their portfolios.
For investors with a higher risk tolerance, Korea’s retail market may have attractive opportunities, he said.
“We also see opportunities in retail markets where consumption trends are evolving, which is very much like Japan,” he said.
Commenting on the upcoming election’s possible impact on the country’s real estate market, Edwards said the market “would benefit from a more market-oriented policy.”
But he added: “At this stage, it is too early to tell.”
Although there has been a grim outlook on global growth and the U.S. economy — coupled with rising oil prices and credit crisis — returns from Asia Pacific real estate are generally expected to be higher than in other regions, he said.
He expects that the global economic impact on the Asian market would lower Asian growth by about 2 percent on average, but the region will remain strong with China, Vietnam and India maintaining 8 to 10 percent growth in 2008.
“The supply of equity for the commercial real estate market is actually growing strong,” he said.
He recommended that low-risk-taking investors be overweight in Singapore and Korea, neutral in Japan and Australia, and underweight in China and Hong Kong.
As for the theory of Asia’s decoupling from the U.S. market, Edwards said it could be true, but only to a certain extent.
“The Asian market will be still influenced by the U.S. economy but much less dependent than before,” he said.
Advising Korean investors who bought Hanwha-LaSalle’s Global Real Estate Investment Trusts Fund, which is currently showing minus returns, Edwards said they should stay the course.
“We don’t see it as a week-by-week trading game. Now is not the time to panic. Markets are actually quite strong,” he said.
By Kim Yoon-mi