Principal Asset Management Eyes Bigger Asia-Pacific Property Role, Citing Investor Underweight

The US-based money manager said appetite for commercial properties in fast-growing markets is underpinned by higher interest rates. Its assessment points to a larger role for Asia-Pacific property in its strategy, particularly as investors reassess their exposure to the region.

Investors reassess Asia-Pacific exposure

Richard Hill, Principal Asset Management’s senior managing director and head of global real estate research and strategy, said investors were structurally underweight in Asia-Pacific relative to the region’s share of total global commercial real estate valuations.

“In my global travels, meeting with investors, whether it be in the US or in Europe or even the Middle East, investors are waking up to the reality that they are structurally underweight in the Asia-Pacific region relative to its share of total global commercial real estate valuations,” Hill said in an interview.

The firm is also seeing continued interest from institutional investors in the Asia-Pacific region seeking access to US commercial real estate. Hill described the US market as “too big to ignore”, indicating that the Asia-Pacific focus is developing alongside, rather than replacing, investor interest in American commercial property.

Principal Asset Management’s position combines a belief in greater Asia-Pacific property exposure with recognition of the continuing importance of the US commercial real estate market.

Source: South China Morning Post