REIT AsiaPac

Sign up for our newsletter

Change in U.S. interest rate expectation spurs January performance (By Patrick Ma, Director, Listed Products and Research, Admiral Investments)

Market Update for January 2019

Change in U.S. interest rate expectation spurs January performance

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


The year 2019 started with a surprise stock market rally across the world, with the MSCI World reported an 8% gain for January. The markets have discounted most of the negative news about slower economic growth and global geopolitical issues. Instead, participants have focused on expectations of a slower pace of increases in U.S. interest rates and a possible reversal of the Fed policy stance. Policy makers have indicated that there is no urgency to increase rates. Indications that China is easing its policies to spur economic growth have also helped to fuel the market rally.

The Asia Pacific REIT sector was supported by the overall positive U.S. interest rate outlook. The GPR/APREA Investable REIT Index reported +7.6% for January, outperforming MSCI Asia Pacific’s +6.8%.  Australia’s and Singapore’s REITs have outperformed their respective equity markets although Japan underperformed its equity market (see table below).

Looking forward, we believe that U.S. monetary policy will continue to drive market performance. The outcome of the U.S.-China tariff negotiation, which will be concluded in March, will also dominate market sentiment. However, a more “dovish” outlook on U.S. interest rates so far should be a positive for Asia Pacific REITs.

REIT Index Performance Corresponding equity index Performance Relative Performance
Jan 2019 YTD 2019 Jan 2019 YTD 2019 Oct 2018 YTD 2018
GPR  250 REIT Index 10.28% 10.28% MSCI WORLD 7.81% 7.81% 2.47% 2.47%
GPR Aprea Investable Reit 100 Index 7.59% 7.59% MSCI AC ASIA PACIFIC 6.83% 6.83% 0.76% 0.76%
GPR Aprea Investable Reit Australia 8.80% 8.80% MSCI Australia 7.21% 7.21% 1.59% 1.59%
GPR Aprea Investable Reit Japan 5.49% 5.49% MSCI Japan 6.10% 6.10% -0.61% -0.61%
GPR Aprea Investable Reit Singapore 9.96% 9.96% MSCI Singapore 5.78% 5.78% 4.18% 4.18%

Based on market close at January 31, 2019 (GPR 250 REIT Index based on January 30, 2019)

All performance numbers are based on total gross returns in USD

Sources: GPR and Bloomberg