Tariff chaos may have upended markets and clouded the macro outlook, but experts at the Mingtiandi Singapore Forum highlighted continued opportunities in one of the world’s most resilient regions for real estate investment.
For the Tuesday event’s keynote panel, decision makers from Canadian investors CDPQ and Oxford Properties, hotel heavyweight Hilton and global consultancy Knight Frank offered a glimmer of hope amid the gloom as they pointed to potential upside in developed markets like Singapore and Japan and emerging economies led by India.
George Agethen, who leads CDPQ’s real estate strategies in Asia Pacific, acknowledged that market volatility creates uncertainty and has an influence on the Quebec-based pension manager’s two key inputs in relation to underwriting: exchange rates and interest rates.
“It does have some impact,” Agethen said. “We haven’t seen the impact too much here in Asia. It’s just been pretty resilient.”
Adjusting Expectations
Speaking at the event, which was sponsored by Yardi, Agethen drew a contrast between the ultra-low interest rate period of the 2010s and today’s more measured climate, suggesting that the previous cycle may have set unreasonable expectations for real estate as an industry.
George Agethen and Alessandro Fiascaris from Canadian investors CDPQ and Oxford Properties
“As inflation went up in the last few years and as interest rates shot up, especially in developed markets ex-Japan, certainly there was a lot of opportunity, a bit of distress in various parts of the world,” he told the audience of over 275 executives in Singapore. “I would say we didn’t really see it here in Asia ex-China.”
Alessandro Fiascaris, head of Asia Pacific at Oxford Properties, noted that any weakness in investment volume could be temporary if a global economic slowdown leads to lower interest rates.
“So while I will say there will likely be short-term to medium-term volatility, I am very constructive on the economy in the long term,” Fiascaris said.
Hilton Asia Pacific president Alan Watts also predicted an easing of consumer demand “for the next couple of quarters” but said he expects long-run gains as conversions of other real estate types boost the hotel sector.
“We will sign, announce and build more hotels this year than we have at any time in our history,” Watts said of Hilton, which has a portfolio of more than 8,300 properties worldwide. “Part of it’s technology, adaptive reuse from commercial into hotel has been very much the story. Overbuild in commercial supply means that a B grade office can be a triple A grade hotel. So that trend seems set to continue.”
India Rising
Watts is particularly bullish on India, where Hilton is expanding rapidly to catch a wave of planned infrastructure investment in the country’s interstate highway network, which could rival the build-outs by America in the 1950s and China in the 21st century.
“Think of those demographics,” he said. “The infrastructure bill would apply that to India, and very much you get the same equation.”
Galven Tan, CEO of Knight Frank Singapore, said the city-state’s status as a safe haven for wealth preservation would continue to make the Red Dot an attractive investment destination.
“We definitely have seen a lot more regional capital moving to Singapore,” Tan said. “As the statistics show, a lot more family offices have been set up, traditionally the Indonesian capital, Malaysia, Thailand — Thai capital has been very active in the Singapore market — and increasingly more from North Asia.”
A Panel in Pictures
Leave a Reply