Money manager eyes Asia-Pacific property for growth, but tells investors to keep bet on US
US-based money manager Principal Asset Management says it is poised to become more active in Asia-Pacific property markets, believing investors have been “underweight” in the region’s office property segment. Richard Hill, its senior managing director and head of global real estate research and strategy, said the group was also seeing continued interest from institutional investors in the…
Principal Asset Management, a US-based money manager, is planning to increase its involvement in Asia-Pacific property markets, despite investors currently underweighting the region. Richard Hill, Principal's senior managing director and head of global real estate research and strategy, stated that investors are becoming more aware of the region's potential.
In a recent interview, Hill explained that higher interest rates worldwide are prompting investors to seek growth opportunities in fast-growing markets. He highlighted the importance of focusing on property types and markets that can generate net operating income growth through development and redevelopment. In the first half of 2022, investment in Asia-Pacific commercial real estate increased by 29% year on year, reaching $103.7 billion, according to MSCI.
Hill expects investors to concentrate on Australia, Japan, Singapore, and South Korea, as these countries are likely to be the primary focus of investor interest in the region. Principal Financial Group, which manages $808 billion in assets, has not yet set a timeline for expanding its involvement in the Asia-Pacific region, but Hill emphasized that the US commercial real estate market remains a crucial part of the global market and should not be ignored due to recent geopolitical uncertainties and rising interest rates.
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