Q4 2009 and Q1 2010 will be key ‘window of opportunity’ - delegates at Cityscape Asia 2009 told

From a landmark New York office tower marketed at 80% less than its replacement cost, to a block of 111 apartments for sale at US$4 million in Houston Texas, the bargains piling up in the troubled US property sector are beckoning a growing number of Asian investors.

The key window of opportunity for Asian investors seeking to enter the US market will be the last quarter of 2009 and first quarter of 2010, Mr Donald Han, Regional MD, Capital Markets, Asia Pacific for Cushman and Wakefield told more than 75 VIP investors attending an exclusive seminar on the sidelines of the three-day Cityscape Asia 2009 event held at the Singapore International Convention and Exhibition Centre.

“The stand-off in the United States market is coming to an end. As the gap between bid and asking prices begins to narrow, deals are starting to happen – and the true window of opportunity is pproaching at the end of 2009,” Mr Han said.

“The perennial favourites for Asian investors in the United States are New York, Los Angeles and San Francisco, especially for office, hotel and retail, valued at under US$100 million. These are accessible to raised opportunistic funds and entrepreneurial family funds, while institutional investors are still on the sidelines at this stage,” he said. While individual assets such as one landmark New York tower were on the market for around US$50-150 per square foot or 80% less than its replacement cost, the more general rule of thumb was for valuations at 50% pricing versus the peak.

Around 50% of the US$82 billion worth of global properties assessed as ‘distressed assets’ were in the United States according to Mr Han, who cited examples such as a block of 480 residential units asking just US$13.2 million and another block of 111 units for US$4 million in Houston, Texas.

Mr Han emphasised that although the US market was currently troubled, it still held long term appeal for investors due its vast size and relative stability. Investment sales, which exceeded US$500 billion in 2007, had slowed to a third of that in 2008 and were down 75% on a yearon- year basis for Q1 2009.

“If anything, the lack of re-investment would have the effect of absorbing the over-capacity and would underpin the performance of the market in 2-3 years time. In the meantime, yields remained attractive for cash buyers with some recent sales in the hotel sector showing an 8.8% return, with office at 7.1%, apartments at 6.7%, retail at 7.4%, industrial at 7.9%”, Mr Han added. Cityscape, the world's largest business-to-business real estate event brand, is catering to the growing appetite of international investors for the United States market with the second annual Cityscape USA event, to be held in the Javit Centre, New York on 18 and 19 November 2009.

Cityscape Asia
Cityscape Asia is an annual exhibition and conference focusing on all aspects of the real estate development cycle. The three day event will run from 19 – 21 May 2009 at the Singapore International Convention and Exhibition Centre (Suntec Singapore). Top deal-makers from leading developers, banks, institutional investors and investment authorities, as well as senior officers from foremost private equity funds and investment advisory firms will gather at Cityscape Asia to discuss key issues and investment opportunities.

Conference highlights include: surviving the global financial crisis; the future for real estate funds; Asian REITS; markets to invest in for long-term growth and returns; country spotlights in troubled times; the Asian retail decade; and green investments.

Cityscape Asia is an extension of the phenomenally successful Cityscape Dubai exhibition, organised by IIR Middle East, which also include Abu Dhabi, India, Saudi Arabia, Russia, USA and Latin America.

UK-based Scala Land Group is a Gold Sponsor at Cityscape Asia. Scala Land Group presents overseas investors with alternative opportunities to buy land in the UK. CNN is the international broadcast partner.

For more information about Cityscape Asia 2009 and related events, please visit: www.cityscapeasia.com