* Asian investors to boost exposure to property
* Australian commercial real estate yields the most in Asia
* Hong Kong & Singapore property sector seen to start
SYDNEY, Dec 6 Asian commercial property prices
will be supported by increased demand from the region's
investment funds as they look to boost their exposure to the
sector, real estate firm LaSalle Investment Management said.
The firm said Asian institutions are under-allocated
compared with their European and North American peers which
invest around 5 to 10 percent of their portfolios to real
Paul Guest, LaSalle's head of research and strategy for Asia
Pacific, said China's insurance funds have practically zero
exposure to property, while pension and insurance funds in most
of the region have between zero and 5 percent.
LaSalle, the real estate investment arm of global property
consultancy Jones Lang LaSalle, said Australia currently
offered the highest Asian returns in commercial property and the
trend was likely to continue.
With a five-year forecast in total returns of about 10
percent per year, Australia topped Japan's 9 percent and South
Korea's nearly 8 percent, it firm said.
"What investors find attractive about Australian real estate
is the high and stable total returns on offer, low volatility, a
solid and positive economic outlook with low unemployment and
very high transparency in real estate markets," said Alexandra
Gray, an associate director of research and strategy at LaSalle,
Still, LaSalle highlighted growing competition from the
region as the property sector bounces back from a downturn.
Guest singled out Hong Kong and Singapore, which are
currently near cyclical bottoms.
"As we move into next year or two years, as these markets
start recovering... we'll start to see them be more competitive
in terms of returns," he said.
LaSalle manages $47 billion worth of assets worldwide
including A$2 billion ($2.1 billion) in Australia.