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By Patrick Ma, Director, Listed Products and Research, Admiral Investments

Asia Pacific REITs Bucked Global Trend to Outperform Equities in 2019 on Robust Japan and Singapore 

Geopolitical tensions could support REIT performance in 2020 as investors seek defensive plays

For most of 2019, global REITs underperformed global equity markets as healthy U.S. economic growth and a benign interest rate environment supported stock investments.

However, in Asia Pacific, the listed property sector outperformed the region’s equities in 2019, propelled by the strong performance of Japan and Singapore REITs. Hong Kong REITs, on the other hand, underperformed as the China-U.S. trade row and local social unrests dampened performance.

As we look forward to 2020, we expect slower global economic growth outlook and governments’ likelihood to deploy fiscal and monetary policy tools to maintain stability to support Asia Pacific REITs’ performance. China’s decision to cut its required reserve ratios to free up liquidity to stimulate the economy on January 1 is one example. At the same time, the escalating conflict between the U.S. and Iran signify rising geopolitical tensions. This pushes fund flows into defensive plays, a development that will also benefit Asia Pacific REITs’ performance.

For December 2019, the GPR/APREA Investable REIT Index for the Asia Pacific region fell 0.8%   versus the MSCI AC Asia Pacific’s 4.4% increase over the same period. An improved outlook on interest rates and concerns over China-U.S. trade issues spurred risk-on market sentiment for most Asian markets. 

In December, global equity markets extended November gains as investors expected no further rate hike for 2020. An interim agreement between China and the U.S. on import tariffs has also helped global markets. The agreement was followed by China’s cutting tariffs on selected goods as part of the deal. The MSCI World rose 3% during the month.

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REIT Index Performance Corresponding equity index Performance
  Dec 2019 2019
Dec 2019 2019
GPR  250 REIT Index  -0.71% 24.35% MSCI WORLD 3.03% 28.40%
GPR Aprea Investable REIT 100 Index -0.79% 22.35% MSCI AC ASIA PACIFIC 4.45% 19.74%
GPR Aprea Investable REIT Australia -0.60% 19.57% MSCI Australia 1.54% 23.15%
GPR Aprea Investable REIT Japan -2.26% 26.67% MSCI Japan 2.11% 20.07%
GPR Aprea Investable REIT Singapore 2.21% 28.11% MSCI Singapore 3.23% 15.05%
Based on market close at December 31, 2019




All performance numbers are based on total gross returns in USD


Sources: GPR and Bloomberg