• Contact
  • Register
  • Sign in
  • FUND SELECTOR ASIA

    SIGN IN

    Access full content on the Fund Selector Asia site, access your saved articles, control email preferences and amend your account details

    Lost your password?
    Forgotten Password
    Cancel

    Not registered?
  • News
    • Latest News
    • Product News
    • People Moves
    • Regulation
  • Views & Interviews
    • Industry Interviews
    • Asset Class in Focus
    • Industry Comment
    • FSA Analysis
  • Data & Research
    • Head To Head
    • Other Data & Research
  • Events
    • Galleries
    • Forum Reviews
    • Awards
  • Special Supplements
    • A Guide To …
    • Fund Insights Directory
    • Bespoke Supplements
  • About us
    • About FSA
    • About Last Word
    • Newsletter Sign-up
    • Editorial Board
X

MOST VIEWED

1. HEAD-TO-HEAD: Axa vs Pimco


2. ESG goes beyond risk management, says Hermes


3. Can Thailand fund’s surprising run continue?


4. Russia’s resurgent funds defy headwinds


5. Premia plans new smart beta ETFs


EVENTS

Event Calendar 2019

Tuesday 31st December

View More Events

Asset Class in Focus

HNWIs should look beyond prime residential, says Invesco

Tags: Asia | Invesco | Real Estate

By Kate Lin, 10 Oct 18

Wealthy investors in Asia should steer away from location as the only component to consider in real estate investing, argues Simon Redman, managing director, client portfolio management at Invesco Real Estate.

Simon Redman, Invesco

Instead, wealthy individuals should take an institutional-like, rational approach to property investing, London-based Redman told FSA during a recent trip to Asia.

Most affluent individuals have good knowledge about real estate, in particular their own domestic market. But in most cases, this also blocks them from looking further afield.

Redman pointed out that even if these investors look at real estate in foreign countries, they tend to focus on residential properties in prime areas in capital cities, such as London and Vancouver.

“What we find is that a lot of capital in residential markets is dominated by high net worth investors, and these are typically residential in the wrong places,” he explained.

He said the locations of these investments are not where majority of people live, resulting in a high degree of vacancies. Such investments are merely betting capital growth instead of income.

“Capital appreciation is driven by demand but the demand and pricing of the prime location is driven by those very investors. As soon as [the wealthy individuals] choose not to invest anymore, prices fall,” he added.

Additionally, in Redman’s view, real estate investment should be made in a global context.

“When you look at equity or fixed income, you would approach it from a global basis. It seems logical.” But many investors do not take the same approach in real estate. “It may not be all of your portfolio. The majority can still remain in domestic markets, [but] a portion of it can be invested overseas and globally,” he suggested.

He added that investors should allocate money to properties that may attract solid demand, rather than investing with any strong emotional links.

For his team, the investment funds focus on seeking stable income generated from the assets. “When we do residential investments, we look for places where everyday people actually live. It might not be as glamorous as those central locations.” The same income-generation approach is applied to industrial and commercial buildings.

Meanwhile, FSA‘s quarterly survey during the third quarter 2018 showed a bigger upward shift in buying intentions for property assets, as compared with recent quarters.

Moreover, real estate is generally not well-correlated with traditional equity and bond investments; it can therefore help to diversify a mixed-asset portfolio. Using proxy IPD Global Property Index, global direct real estate has a correlation of 0.3 with the MSCI World Index and -0.26 with the Barclays Global Aggregate Bond Index, according to data provided by Invesco.

Leave a comment Cancel reply

You must be logged in to post a comment...

Ads

Related
Content

Sign up to our newsletter
  • Asset Class in Focus

    TT International hunts for China themes

    Asset Class in Focus

    China bond funds rally in 2019

  • Latest News

    Huge Stock Connect flows linked to MSCI

    Latest News

    China Top Trumps – Hong Kong fixed income

  • Asset Class in Focus

    The problem with growth investing

    Asset Class in Focus

    A look at Asia tech overweights

OTHER STORIES FROM LAST WORD...

DeVere buys UAE-based advice firm

Financial planner adds £461m as...

Australians not prioritising financial planning

More news from IA

Experts upbeat on green bond...

Are you investing in controversial...

Lazard offers Scandinavian bond fund

More news from EI

Family crime groups wreaking havoc...

DFMs failing to provide investment...

Former BBC man boosts LGIM’s...

More news from PA

  • View site map
  • Cookie Policy
  • Privacy Policy
  • Acceptable Use Policy
  • Terms and Conditions
  • Contact

Fund Selector Asia

Published by Last Word Media (HK) Ltd, Suite 2003, 20/F Capitol Centre 1, 5-19 Jardine's Bazaar, Causeway Bay, Hong Kong, SAR. Copyright (c) 2016. All rights reserved. Company Reg. No. 2127095.

Fund Selector Asia provides up-to-the minute news, tools and professional resources for fund selectors, fund analysts, fund influencers, wealth management heads, investment councillors, heads of sales and client-facing wealth advisers throughout English-speaking Asia. No news, articles or content may be reproduced in part or in full without express permission of Fund Selector Asia.

Nothing in this publication amounts to a personal recommendation or endorsement. The material contained in this publication is intended for information only and does not constitute the provision of advice. Neither the writer nor the publisher accepts any responsibility for any loss or damage caused by any use of or reliance on the opinions or views expressed in the publication Fund Selector Asia

We use cookies to give you the best experience. If you do nothing we'll assume that it's okay. Find out more.