Cushman & Wakefield data shows that a total of 225 Real Estate Investment Trust (REIT) products were active in the Asia market at the close of 2023, with a combined market valuation of US$252.1 billion, down 7% on the prior year.
Within the region, Japan, Singapore, and Hong Kong were the largest three markets by market value as at the end of 2023, primarily due to their early adoption of REIT products, and they accounted for more than 80% of the total Asia REIT market. At the same time, emerging REIT markets including mainland China and India have been gaining traction, gradually bringing new vitality to the Asia REIT market environment.
Looking at market value performance in 2023, the India REIT market witnessed the steepest rise in total market value at 31% year-on-year. Singapore’s REIT market also saw growth, with a 4% expansion in market value, making it the sole market in the top three to see an uptick in value. In contrast, the Hong Kong and Japan markets endured declines in their US$ REIT market values, by 13% and 9%, respectively. The fall in the Hong Kong REIT market value was mainly due to a decline in valuations, while Japan’s market value was largely influenced by the yen exchange rate.
This report provides an in-depth analysis of the REIT markets in Japan, Singapore, Hong Kong, mainland China, and India. It covers key performance indicators such as market value, leverage ratio, dividend yield, price-to-book ratio, and total return for each market.
In 2023, the price-to-book ratios for the three major REIT markets of Japan, Singapore, and Hong Kong all presented discounts compared to their net asset values. In terms of total return, while the Singapore market registered a positive total return at 7.0%, both Japan and Hong Kong recorded negative returns in 2023, at -0.3% and -23%, respectively. This further highlights the impact of macroeconomic conditions on REIT markets and their potential performance volatility.
By property sector, industrial/logistics and multifamily REITs were favored due to their superior risk resilience, and these areas performed well in 2023. In contrast, office asset REITs continued to struggle in the face of the prevailing economic conditions and evolving working styles.
Key Highlights
- At the close of 2023 the combined value of the Asia REIT market was at US$252 billion, down 7% y-o-y. The traditional REIT market powerhouses of Japan, Singapore, and Hong Kong continued to dominate the market, with a combined share of more than 80% of the total Asia REIT market value. However, the emerging Chinese mainland and India REIT markets, as the fourth and fifth largest in Asia respectively, are adding new layers of opportunity and growth.
- Singapore’s REIT market saw market value growth and an average total return of 7.0% in 2023, although total return performance varied greatly by sector, ranging from -24% in the office sector to 19.4% in the data center sector.
- In the Chinese mainland market, with new policy initiatives including interest rate cuts and more flexible financing options for public infrastructure REITs, a total of seven new REIT products were issued in the first four months of 2024, including the first batch of four consumer infrastructure REITs.
- In India, the combined office REITs portfolio will reach 180 million sq ft, or around 20%–22% of nationwide Grade A office stock by 2025, up from 11% currently. The Nexus Select Trust, currently India’s sole retail REIT, has also announced plans to double its portfolio size over the next five years to around 20 million sq ft.
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