Citing excessive government curbs and severe regulation, UBS says it has no interest in acquiring residential assets in the Asian financial hubs.
The threat of government curbs to tame prices makes Singapore and Hong Kong residential property unattractive, so says the regional head of UBS Asset Management’s real-estate investment unit.
Speaking with «Bloomberg» Graham Mackie said «We have no exposure in the Singapore residential market and we are very comfortable not having any exposure, historically it’s been very exposed to government policy intervention and that continues.
Mackie holds similar views on the state of the Hong Kong residential market. «Government policies have been very, very severe in Hong Kong and it’s just not a market where we see an opportunity right now,» Mackie said.
In a strategy which dovetails with government policies to develop a more service-oriented economies, UBS is targeting investments in business parks and light industrial developments instead.
Japan Looks Better
In Japan, where the feeling is that cheap borrowing is there to stay for the foreseeable future, UBS is looking for more substantial real estate exposure. Earlier this week UBS Asset Management’s Real Estate & Private Markets business announced the launch of a $400 million new initiative to invest in the Japanese hotel sector.
This strategy will focus on securing value-add and development opportunities in key metropolitan and regional areas such as Tokyo, Osaka, Nagoya, Fukuoka and Hokkaido, amongst others. The game plan is to target assets with potential for refurbishment, repositioning or conversion. This is in addition to investing in development projects where there is a third party operator in place. The primary focus will be on the limited service hotel sector.
«Our investment thesis is underpinned by the clear gap between strong growth in demand for overnight accommodation and the lagging response in supply of new hotel rooms,» said Mackie.
