Asia bracing itself for downturn in property markets

*Asia bracing itself for downturn in property markets*

Saturday, 11 October 2008
Property Wire

Asian property markets are falling victim to the global credit crisis
and seeking ways of lessening the impact at a local level.

In Cambodia the real estate boom which began in 2007 is over according
to a leading economist and in the Philippines real estate professionals
are calling for investment trusts to be approved in a bid to boost the
market.

'Our property markets are closely connected with the stock markets in
South Korea and other Asian countries. If these markets fall, we are
affected,' Kang Chandararot, head economist at the Cambodia Institute of
Development Study.

'Also South Korean and other Asian markets are very closely connected to
the US and these countries are our biggest investors. We will see a
recession in the short term, perhaps in six to 12 months,' he added.

The South Korean government issued a statement this week urging banks to
sell foreign assets to increase liquidity. South Korea is Cambodia's
biggest investor and a fall in South Korea would be especially harmful
to local growth.

No figures on the depth of the decline are available, but industry
experts said the impact could be felt soon. Cheam Yeap, chairman of the
National Banking and Finance Committee, said the global finance crisis
might affect the real estate market, but not the economy as a whole as
it is sufficiently diversified in tourism, agriculture and garment
manufacturing to withstand the downturn.

Property firms in the Philippines believe that establishing real estate
investment trusts (REITs), will help to boost the local market. Jaime
Ayala, president of Ayala Land, Inc., said it would open up another
avenue to raise capital and give the public a new investment vehicle.

'It will be a win-win situation. It will allow us to get more capital to
allow us to develop more projects, and at the same time, this will be a
nice form of investment for the public,' he said.

'This will spur economic activity since this will give investors good
yields. This will also give property companies a chance to develop more
projects,' said Jeffrey C. Lim, chief finance officer of SM Prime Holdings.

A bill allowing the introduction of REITs is currently going through the
House and Senate.