Adverse tax developments are viewed as the biggest threat to the future of Real Estate Investment Trusts (REITs) in the Asia-Pacific, a new REIT Asia-Pacific survey has found.
The research, conducted by Baker & McKenzie and The Trust Company, found that 71 per cent of respondents rated adverse taxation developments as the biggest threat to the future of REITs in the Asia-Pacific.
The effects of financial engineering rated as the second biggest threat at 69 per cent, compared to 74 per cent in the 2009 survey findings.
Meanwhile, the report indicated investors in Australian REITs should be encouraged by very strong anticipated growth prospects for next year, with 59 per cent of respondents rating it as the country offering the best opportunity.
However, Singapore retained its top-tier ranking in terms of overall market growth, opportunities and regulatory support.
The Philippines, Thailand, Vietnam and Indonesia were viewed as the countries with the least attractive REIT opportunities.
“Overall, the REIT sector can justifiably feel that the worst may be over. The reduction in REIT debt levels have created some breathing room, with rewards coming via higher share prices and improved levels of volatility compared to the broader market,” the report said.
“However, we know that there is still some way to go before we can declare the recovery is complete. The next 12 months are likely to go a long way towards defining the future of the Asia-Pacific REIT market.”
The survey was conducted on 140 local and regional property professionals for REITs across 13 Asia-Pacific markets.
