There are markets and sectors all over the world with localised distress and Asia Pacific is no different. Distress provides an opportunity for some investors, but others will look around thinking: here we are again, somewhere near the top and there’s not a lot of return on offer.

Investors in Asia Pacific can take a different view however. This region is going to be the driver of global growth for the next century and it is not all about China. The emerging markets of India and Vietnam both have large, youthful populations, a growing well-educated middle class and are set to record GDP growth of around 6% this year. What developed nation can say the same?

India is a huge business process outsourcing market, which is driving demand for office real estate. This year saw the launch of the nation’s first real estate investment trust, which has been a roaring success: as I write its shares are up 30% since the IPO.

Vietnam is taking advantage of rising costs in China and the trade war to become a major manufacturing hub. Japanese and Korean companies are heavily involved. The growing middle class is hungry for better accommodation and global brands.

Savills is investing heavily in both these markets because we believe in their bright future. You should take a look too.

Don’t succumb to Olympic fever

Next year is Olympics year for Tokyo and it is traditional at this time for commentators to get very excited about the effect this sporting extravaganza will have on the economy in the longer term.

For Tokyo, that’s easy – not a lot. In some cities, hosting the Olympics is a huge boost to infrastructure. Well, Tokyo already has great infrastructure, so no change there. The recent Rugby World Cup saw an influx of Western first-time visitors to Japan, who were dazzled by the cleanliness and efficiency of Japan’s infrastructure and might now be wondering whether what they get at home is worthy of first-world status.

The effect on tourism will be significant, but brief. More and more tourists are coming to Japan and that will not change, but there’s a danger in believing one-off events will drive the market.

Further reading:
Savills Vietnam

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Christian F Mancini