The retail sector is likely to lead the growth in the Asian property market this year. This is mainly attributed to the growing consumer dollar in India and China, said property advisor DTZ.
According to DTZ, investments in the region are expected to come from Asian players, who have vast funds to go around.
Global investment in property could grow by about five percent in 2010, said DTZ.
Investors could be spoiled for choice this year, with the recession finally over, and around 84 percent of markets in the region going at or below fair value.
However, one sector could surge ahead of the others.
“We have a greater number of opportunities categorised as ‘hot’ in the retail sector than we do in office or industrial,” said Mr. David Green-Morgan, research head of DTZ in Asia Pacific.
“And that’s primarily driven by the tier 2 and tier 3 cities in China and India. With the growing middle classes in those two locations, retail is one of the natural growth areas.”
DTZ expects better performance from the commercial-retail sectors of more developed markets like Sydney, Hong Kong and Singapore.
It also believes that China, as a whole, could surpass Japan as the second largest property market in the world by 2011.
As the tight credit conditions have not affected Asian investors much compared to Western players, these Asian players are expected to lead property investments this year.
“Most of them are all equity players, and so they are benefiting at the moment from being in that position because they are able to fund many of these transactions immediately, rather than having to wait for any debt funding through the banking system,” said Mr. Green-Morgan.
However, while the outlook for commercial property in Asia is bright this year, DTZ said that it is not the only growth market around.
With almost a double-digit depreciation seen recently in several property prices in the US, investors could pick up quite a few bargains and take advantage of the low base effects.