Conformist, Contrarian or Vintage? CBRE Identifies Real Estate Investment Strategies for Asia Pacific in 2023

Asia Pacific – November 11, 2022 – As Asia Pacific continues to contend with global economic uncertainty, CBRE has identified a range of strategies for real estate investors in 2023 based on their investment approach and risk appetite.

“While market fundamentals remain strong, real estate investors in Asia Pacific are finetuning their plans for the upcoming year in the expectation of turning more acquisitive by mid-2023. As investors navigate headwinds, at least in the short-term, there is an opportunity for them to capitalise on a number of differing strategies ranging from conventional to contrarian,” said Dr. Henry Chin, Global Head of Investor Thought Leadership and Head of Research, Asia Pacific for CBRE.

CBRE identified three strategies —Conformist, Contrarian, Vintage— that offer the most attractive opportunities in real estate sectors and geographic markets, together with the most viable entry routes:

Conformist Investment Strategies – the most conventional and popular acquisitions, primarily mainstream assets projected to benefit from secular demand and rising rents for the foreseeable future:
- High-quality prime office properties in major high growth cities (centrally located, fully amenitised, newly built) driven by occupier flight to quality and a lack of supply.
- Modern logistics assets that continue to report strong rental growth and low vacancy.
- Multifamily properties in major Japanese cities that offer attractive cash-on-cash yield. 

Contrarian Investment Strategies – generally go against mainstream opinion and while involving potentially greater risk, can also provide attractive returns for investors:
- Early disposal of logistics and multifamily investments to lock-in profits.
- Purchase of hotels that are poised to benefit from a gradual recovery in international tourism.
- Acquisition of retail properties, rents for which have largely bottomed-out.

Vintage Investment Strategies – which are highly dependent on market timing. While real estate has enjoyed a strong run since the Global Financial Crisis, the current financial market volatility, rising bond yields and a potential global recession could create opportunities that, if missed, would take some time to become available again:
- Acquiring assets on the public market, such as REITs trading below their Net Asset Value (NAV) and other listed vehicles that are undervalued.
- Debt investment and distressed opportunities that are available in selected markets.
- Blue-chip assets, for which the window of opportunity to capture discounts is minimal.

ENDS

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