Asian Rebound

There are now greater opportunities to be found in Asian versus European markets for U.S. investors seeking to diversify offshore. According to the latest IPD data, the unleveraged return on direct property investments in Asia was 8.4 percent in 2011, up modestly from 6.6 percent in 2010. European markets, in contrast, returned 6.6 percent over the course of 2011.

The Pan Asia return is the weighted composite of the local currency returns for the nine markets shown in the graph above. Most markets have witnessed strengthening total returns, the exceptions being Hong Kong and Singapore.  But the key finding is that the top three markets are all influenced by China: Hong Kong, the Mainland itself and Taiwan. There was a wide range of returns included in the 2011 Pan Asia composite, from a high of 22.3 percent for Hong Kong to 3.4 percent for Japan. Hong Kong and Japan have occupied the top and bottom positions, respectively, in each of the last three years.

—Max Arkey is a senior manager for IPD North America.

(total returns, year to 2011 vs. year to 2010)

Source: IPD Global Property Index (