In the latest episode of PropCast, Andrew Teacher is joined by David Green-Morgan, global head of real assets research at MSCI, to discuss the similarities and differences between real estate markets in the UK and Asia-Pacific – and the importance of data in understanding them.
Over the years, PropCast has covered a range of topics affecting UK real estate, from interest rates to the working-from-home revolution, but admittedly rather less on how these global trends have influenced the rapidly maturing Asia-Pacific region.
Discussing this fascinating corner of international real estate with Andrew Teacher is an expert with multi-decade experience in analysing real estate trends in East Asian markets, discussing the unique nature of many of the markets in the Pacific.
David Green-Morgan now heads real assets research for MSCI globally, and was previously head of Asia-Pacific research and operations for Real Capital Analytics which was acquired by MSCI in 2021. Green-Morgan started his career in the UK with Investment Property Databank (IPD), where he analysed the real estate portfolios of some of the UK’s largest private sector pension funds, using data and analytics to improve performance.
Employing over 4,000 people and with a revenue of over 2 billion USD, MSCI is a major figure in collating and analysing real estate transactions globally. It has a presence spanning London, Singapore, New York, San Francisco, and Sydney.
Green-Morgan manages the research team in the Asia-Pacific region, looking at real estate markets in a huge area spanning from India to New Zealand, and providing up to the minute market information as well as macro trend and strategy insights to clients at the local, regional and global level.
The podcast discusses the often-idiosyncratic nature of some Asia-Pacific markets, including Japan, which has recently diverged dramatically from other major central banks, and Australia, where physical retail is bucking the e-commerce trends as in other countries.
“We’ve obviously got the big outlier in terms of monetary policy which is Japan, continuing to keep its interest rates at virtually zero – which of course is offering investors a big differential in what investors are finding in the rest of the world and the rest of Asia”, says David, discussing the unique nature of Japanese institutions.
The discussion also touches on the challenges facing investors and asset managers in Hong Kong in an increasingly difficult business climate.
“Unfortunately, the tide has started to turn in Hong Kong”, says Green-Morgan, “with the domestic political issues as well as a very strict Covid-19 policy for two or three years, which has made it a very domestic market with virtually no international capital transacting in Hong Kong”.
Many companies have moved to other Asia-Pacific centres such as Tokyo, Sydney, Seoul or Singapore due to the challenges of doing businesses in the quasi-autonomous city, as political and economic control shifts to the Beijing government.
The Asia-Pacific region has also had a different approach to Covid-19 than the rest of the world, with run on effects for economies across the globe.
“Seoul and Korea as a whole had, if you can, a very good Covid-19 period as so much capital which had been investing overseas was deployed in commercial real estate,” Green-Morgan explains. “In Korea we saw strong price growth in 2020 and 2021 in offices and logistics.”
“Singapore on the other hand has had a tremendous 2022 with a big surge in office activity, with landmark buildings trading.”