Home prices across key cities in Greater China are now three times less affordable than in New York City according to Bloomberg data, which is both creating a class of home renting professionals and giving a boost to the region’s nascent multi-family real estate sector.
With acquisitions of multi-family assets in mainland China having more than doubled in 2021 compared to the 2015 to 2019 average, and deals in Hong Kong also on the rise, according to MSCI-RCA data, Mingtiandi has brought together a panel of industry leaders for a panel discussion next Tuesday, 22 March, to share their views on the future of Greater China’s rental residential market as part of the APAC Residential Forum 2022 on MTD TV.
Appearing in the one-hour show at 10:00 am Hong Kong time will be fund managers Claire Tang, co-chief investment officer for Asia Pacific and head of Greater China at LaSalle Investment Management, as well as David Fassbender, managing director and head of Southeast Asia fir PGIM Real Estate.
Also joining the event, which is sponsored by Yardi, are rental accommodation specialists Sachin Doshi, founder and chief executive of Weave Living, and Charles Ma, managing director for China investment at US-based Greystar.
Policy Support for a Rental Market
Data compiled by Bloomberg showed that housing price-to-income ratios – which measure the cost of a typical housing unit compared to household income – in key cities of Greater China remained high with the median home cost in Hong Kong now more than 46 times the median income, with that ratio of housing price to income at 43.5 in Shenzhen, 41.7 in Beijing and 36.1 in Shanghai.
These rates were all more than triple the 10.5 price-to-income ratio in New York City, which is the most expensive market in North America, and more than double the 14.7 ratio in Tokyo.
With housing affordability becoming a political issue, Chinese policy-makers have been encouraging development of a rental housing sector with many government sales of land in first-tier cities now requiring that bidders commit to including a rental housing component.
With urban professionals in China becoming increasingly mobile, investors have also taken notice of the favourable returns available from multi-family investments, with a survey by JLL last year indicating that most investors in the country’s rental housing sector expected to achieve investment yields of from 4.5 percent to 5.5 percent on their projects.
MTD’s APAC Residential Forum
The speakers in Tuesday’s program have been among the leading players in Greater China’s fast-growing multi-family market with LaSalle having teamed up with local property developer Jingrui Holdings last year to acquire a mixed-use property in Shanghai for $68 million which the partners are now converting into rental apartments. LaSalle’s venture in Hongqiao follows Greystar’s announcement in 2020 of its second apartment project in China with that 8,000 square metre (86,000 square foot) greenfield site in Shanghai’s Jing An district currently under development.
In Hong Kong, Weave Living, which is backed by Warburg Pincus, has been one of the early movers in creating branded, long-term rental accommodation with the company this month launching its sixth location in Hong Kong after completing its conversion of a budget hotel in Kowloon East into a 99-unit apartment complex.
PGIM’s real estate arm officially entered Hong Kong’s multi-family market earlier this year when the fund manager bought a pair of hotels in the city for $109 million, which it is now in the process of converting into co-living accommodation.
Japan and Australia on the Way
The event on Tuesday is part of the month-long Mingtiandi APAC Residential Forum which kicked off this week with a spotlight interview with Greystar managing director Ed Boyd and APG Asset Management senior director Dominic Doran.
The series will continue on Thursday, 24 March, with a panel on multi-family investment in Japan, featuring Laurent Jacquemin, head of Asia Pacific for AXA IM Alts Real Assets; Daisuke Noguchi, head of Japan for Allianz Real Estate, Emilia Teo, a managing director at Singapore’s TE Capital Partners and Minoru Machida, chief executive of Tokyo Trust Capital.
The final week of the forum includes a panel on multi-family investment in Australia on 29 March with Sam Bisla, head of living for Australia at Hines, Laurent Fischler, head of investments for Asia Pacific at Ivanhoé Cambridge and Stephen Gaitanos, managing director and Group CEO for Scape.
The series will be capped off on 31 March with a panel on debt financing opportunities with Nick Shi, global head of real estate investment with Haitong International, Trent Winduss, head of Asia secured debt investments and head of Australian investments for Phoenix Property Investors and Joel H Rothstein, shareholder and chair of the Asia real estate practice at Greenberg Traurig.