Kathleen Chu / BloombergTokyo overtook Shanghai as the best Asian city to buy real estate as investors seek less risky investments for 2009, a survey by the Urban Land Institute and PricewaterhouseCoopers LLP showed.
The Japanese capital has the best prospects and lowest risk among the 20 locations covered by the Emerging Trends survey. Singapore is in second place and Hong Kong is third, according to the ULI, a Washington-based research firm, and New York-based accounting firm PricewaterhouseCoopers.
Property values are tumbling in New York, London and Tokyo after the global credit crisis roiled lending and sidelined buyers. In Asia, markets with the strongest economies and highest levels of liquidity will be most attractive as investors show a flight to quality, according to Stephen Blank, a principal researcher at the ULI.
“Tokyo is a weaker market than last year, but clearly stronger than other global financial centers,” according to executives interviewed by the ULI.
Among executives surveyed, 40 percent recommended “hold” for properties in Tokyo, 32 percent suggested “buy” and the rest said “sell” for real estate in the city.
Shanghai fell to fifth in the survey because its risk rating was ranked 11th, the report showed.
The survey was based on interviews with executives at 60 property developers and investment companies. Property developers surveyed include Mitsui Fudosan Co., Japan's largest developer, and Hongkong Land Holdings Ltd. Funds that responded included Morgan Stanley Real Estate which manages $96.3 billion globally as of June 30, and RREEF Alternative Investments which manages about 59.7 billion euros ($76 billion) globally as of Sept. 30.
“Financing will be the single biggest issue facing the industry in 2009.” Blank said.
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