Market Overview
The outbreak of conflict in Iran has introduced a new layer of uncertainty for Asian real estate markets, with the primary transmission channel being higher oil prices and their impact on inflation expectations and central bank policy across the region. While the US appears intent on keeping the conflict limited, equity market weakness and rising bond yields may prompt the Trump administration to seek an early resolution — a dynamic that could cap the downside for risk assets.
日本
In Japan, J-REITs have held up relatively well and present an attractive entry point as fiscal year-end selling pressure from financial institutions abates. Developers continue to deliver strong earnings, and while NAV discounts have largely closed, historical precedent and the prospect of strong May results suggest it is too early to exit.
澳大利亚
A-REIT weakness predates the conflict, with rate hike fears weighing on residential names despite solid fundamentals and management confidence on demand. Goodman Group remains a key watch with guidance upgrades and data centre leasing announcements expected by mid-year. The May federal election is likely to bring housing supply policy into focus, a medium-term positive for Stockland and Mirvac.
Singapore & Hong Kong
Singapore developers have significantly outperformed SREITs over the past year, underpinned by resilient residential demand — as illustrated by GuocoLand’s strong weekend launch — though the sector has already re-rated considerably. In Hong Kong, developers had reached multi-year highs prior to the conflict and have since corrected; REITs may offer near-term defensiveness as profits rotate out of developers. Accommodative monetary conditions and the prospect of policy support under China’s 15th Five-Year Plan, including a potential inclusion of REITs in Stock Connect, provide a constructive medium-term backdrop for Hong Kong.
