CITYWIRE (Excerpt): Identifying the next hotspots in 'resilient' Asian real estate

The following article was originally published on Citywire.com.

Commercial property values in Asia are better weathering the storm of rising rates and PGIM Real Estate's Benett Theseira is finding thematic growth opportunities in demographics, digitalisation and decarbonisation.

Focusing on areas still generating rental growth is key, Theseira said. PGIM remains bullish on logistics, a big winner from ecommerce's rise, and residential property, particularly in Japan. Both are areas it has now favoured for a few years.

After offloading a lot of its regional retail exposure in 2020 on valuation concerns, the asset manager is turning more positive, with Theseira eyeing opportunities among the survivors.

'We are still very positive on logistics, which is probably one of the only areas continuing to see rental growth across the board, and residential. The Japanese multifamily market has been super-resilient, though everyone recognises it, so pricing is quite competitive,' he said.

'Retail is more attractive on a relative basis right now as offices are impacted and industrial is become more expensive. The retailers that have survived five plus years of disruption have really reformatted their businesses into omnichannel customer experiences.'