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SG Asian property equities on the up: report

Property Here - Thursday, April 25, 2013

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By Nikki De Guzman:

With growth taking place due to Japan's property policy changes, Asian property equities rose +9.8 percent at the end of Q1 2013, according to a report from Henderson Global Investors.

Japanese REITS posted a return of +36.2 percent in Q1 2013 and are still offering a dividend yield of over three percent — an attractive proposition considering that government bonds hover at only +0.5 percent, the report said.

However, market enthusiasm in China, Hong Kong and Singapore have declined following the introduction of cooling measures in these countries. Property stocks in China fared the least, slipping 9.2 percent as investors held back due to lack of clarity in property measures at the local level. To address this issue, local governments released more details on the measures in March that dispelled concerns about potential harsh measures.

Over in Hong Kong, property stocks corrected due to negative reports of property tightening measures such as the 25 basis points mandatory increase in mortgage rates. The index declined 2.4 percent in Q1, while volume transactions contracted.

Singapore also saw muted investor demand with the index dropping 1.6 percent. However, transaction volumes held up despite the cooling measures, indicating real buying from end users.

Moving forward, Asian real estate is expected to continue with its positive upturn.

Tim Gibson, Fund Manager of Henderson Horizon Asia Pacific Property Equities Fund, believes that fundamentals will remain intact as property values and earnings, particularly for prime assets, are continuing to grow this year.



Nikki De Guzman, Junior Reporter at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@allproperty.com.sg