Investment opportunities available in 2015

Investment opportunities available in 2015Good investment opportunities are available in subregional retail centres, offices close to CBDs and selected suburban office markets in Sydney, according to LaSalle Investment Management’s latest ‘Investment Strategy Annual’.The 21st edition of the LaSalle report provides an outlook for global real estate markets over the next 12 months. It suggests that one of the best investments in the office sector are properties close to the Sydney CBD with good tenants and a long weighted average lease expiration. The rent growth outlook for office real estate in Australia has improved as demand has picked up, says the report, with Sydney and Melbourne taking the lead.The report also suggests subregional and neighbourhood retail centres offer good opportunities, in addition to dominant bulky goods centres that can capitalise on the housing rebound.In terms of the macro-economic outlook for the Asia-Pacific region in the coming year, LaSalle predicts below-trend growth.Office markets with immediate supply shortages will perform the best, such as Singapore and Tokyo. Logistics has a positive outlook due to the maturing of the sector in much of Asia, strong demand from occupiers and a comparative shortage of modern facilities.The retail sector is expected to underperform as below-trend retail sales growth, shallow wage gains and fragile consumer confidence restrict sales volumes and retailer margins.As for residential, demand for rental housing in South-East Asia and North Asia remains low, with only modest rent growth expected in 2015. Supply has kept ahead of demand across most markets, says the report.”Investors need to be conservative in their underwriting and cautious in their expectations,” said Paul Guest, LaSalle’s head of Research & Strategy, Asia-Pacific. “They should focus on holding assets in 2015 that can be improved and/or actively managed; where taking development risk, concentrate on sectors where there is abundant end user demand driven by big trends; and avoid markets where aggressive rent growth has already taken place or needs to be priced in.”To download the report click here.