Undervalued Asia real estate presents attractive opportunities

Pearly Yap, Portfolio Manager, Equity Income, at Eastspring Investments, assess Asia’s real estate sector.

There is no doubt that the Asian commercial real estate sector has been hit hard by the Covid-19 outbreak and is, in fact, the sector with the worst share price performance since the pre-crisis peak on 17 January 2020 according to Goldman Sachs data. However, investors appear to be pricing a short- to medium-term setback as a long-term downturn.

We believe that the market has overreached and is undervaluing the long-term case for segments such as malls, which are quickly pivoting, and offices where there are signs of long-term resiliency despite the WFH culture. On top of that, government support measures, such as tax and rental waivers, are also providing near-term relief, which is not being reflected in current pricing.

Read der full report at Eastspring.com/lu.