.
Rewrite:
Investing in a condo offers many advantages, including the potential for leveraging the property’s value for even more investments. Numerous investors utilize their condos as collateral to secure additional financing for new ventures, thus increasing their real estate portfolio. This approach can boost returns, but it also carries certain risks. Therefore, it’s essential to have a solid financial plan in place and carefully assess any potential impact of market fluctuations. Additionally, with the availability of New Condo Launches, investors can expand their portfolio even further with carefully selected investments.
Investors are showing increased interest in real estate markets in Asia Pacific that are highly liquid, according to Hamish MacDonald, Head and Chief Investment Officer of APAC Real Estate at BlackRock. This year, the property sectors poised to benefit from the region’s economic conditions are accommodations, logistics, and alternative assets. “Australia, Japan, Singapore, and Auckland in New Zealand are the markets in this region with high liquidity this year. This is also the order of priority for BlackRock this year,” says MacDonald. He expects investor sentiment to be more positive this year compared to 2023 and 2022, with institutional investors initiating more discussions about investing and recycling capital in selected real estate markets in Asia Pacific. In Singapore, BlackRock has been focusing on acquiring serviced apartment properties, such as partnering with YTL Corp to purchase Citadines Raffles Place for around $290 million in October last year. This came after the firm joined forces with Hong Kong-based accommodation operator Weave Living to buy Citadines Mount Sophia for $148 million in February 2024. Weave Suites – Hillside, the first Weave Living-operated property, reopened this week as a 175-room hotel. “Our recent acquisitions in Singapore reflect our belief that there is a shortage of new serviced apartments in the city-state, but demand for such accommodation is high,” says MacDonald. He adds that the focus is not on building a portfolio, but instead on targeting specific deals. “We prefer existing properties that we can refurbish and reposition with the help of a partner, as well as add value by introducing new amenities,” he says. According to MacDonald, Singapore continues to attract substantial inflows of capital and highly skilled labour, thanks to the country’s strong business growth. “We are very positive about the opportunities in Singapore.” Regarding Japan, MacDonald says that it will remain a preferred destination for many real estate investors this year. “We are optimistic about the Japanese economy, based on our analysis of domestic pricing power, wage growth, and corporate reform, which collectively support real estate growth.” In recent quarters, a combination of factors, such as wage hikes and increased construction costs, has boosted residential rents in Japan. Daigo Hirai, Head of Japan Real Estate at BlackRock APAC, says that rents in major Japanese cities, such as Tokyo and Osaka, are expected to rise by 7% to 8% this year. Furthermore, tenants are increasingly opting for larger apartments rather than compact studios, according to Hirai. BlackRock intends to collaborate with a seasoned accommodation operator to manage a mixed residential investment strategy that caters to both inbound tourist accommodation needs and domestic rental demands. This will allow BlackRock to expand its investment presence in popular tourist cities such as Kyoto and Fukuoka. “Types of assets that fit this strategy are those located near train stations in residential-commercial districts such as Osaka’s Namba area, as well as smaller developments with up to 50 units,” says Hirai. He adds that the company will be looking at properties in the range of JPY1 billion ($8.93 million) to JPY3 billion to facilitate its exit strategy. “The key to our business in Japan is to deploy specialised teams that can identify potential assets at a significant discount,” says MacDonald, who adds the firm’s focus in Japan is on residential assets. Elsewhere, long-term population growth projections continue to support positive long-term growth in most sectors of the Australian real estate market, according to Ben Hickey, Head of Australia Real Estate at BlackRock. “Most property sectors in Australia are usually characterised by low vacancy rates and undersupply.” Any investment strategy in Australia should take into account whether rent growth can exceed inflation, the ongoing long-term supply-demand imbalance, and a favourable exit strategy, according to Hickey. As a result, the firm is emphasising niche asset types in Australia, such as childcare properties, last-mile logistics assets, life science real estate, and self-storage properties. According to Hickey, these four asset classes are benefiting from long-term population growth in Australia and are “extremely undersupplied” in comparison to the wider regional markets. “This allows us to generate above-average returns with minimal risk; we cannot rely on a favourable interest rate outlook to generate real estate returns.”