Why Asian REITs?

Asian REITs are one of the best ways to participate in the growth and urbanisation of Asian economies.

REITs are a new asset class to Asia (outside Australia) and only really started to be accepted as a viable investment option in Asia ex-Australia from 2012.

As at May 2014, the FTSE EPRA/NAREIT Developed Asia Real Estate Index was only composed of 26% non-Australian REITs, although this was up from 20% at the beginning of 2013. We expect REITs will ultimately dominate Asian listed real estate indices as they do in the US and Australia.

The total market capitalisation of the Asian REIT sector was USD 290bn (USD 93bn Australia) at the end of December 2014. The Asian ex-Australia portion has grown from USD 130bn to USD 200bn in the last two years. However, this is still tiny when you consider the value of potential property that will injected into REITs in the future.

Asian ex-Australian REITs have lower leverage and are more simple rent collectors than elsewhere.