Asian real estate portfolios are more stable and sustainable than North American property, according to a new survey conducted by CBRE - the property intelligence firm.
CBRE has a Global Real Estate Sustainability Benchmark (GRESB) that gauges the health of property markets and their sustainability over time on the basis of two factors - Management & Policy and Implementation & Measurement.
The participants (usually real estate investors and developers) are surveyed from all regions of the world and are scored according to their response on several parameters like management, policy and disclosure, performance indicators, risks and opportunities and more.
The survey found that Asia had outperformed North America in its GRESB scores securing 46 points as opposed to North America's 44 points. Although North America's score advanced 13 percent, Asia's score increased by 23 percent.
The region now ranks third on the GRESB scale after Australia/New Zealand and Europe scored 61 and 47, respectively.
Tim Shen, head of sustainability in Asia at CBRE, said the region's noteworthy performance and its improvement from the previous year was "very encouraging" adding that "it shows that this sustainability is not a fad in real estate but a strategic issue with long-term implications," according to The Business Times.
Despite China's staggering property market and the risk of a property crash, investors are still confident about Asia's real estate segment.
More recently, the Carlyle Group raised $3.9 billion in its fourth fund in the region - making it the second largest private equity amount ever raised for Asian real estate.
"The regional economy has become much, much bigger. Ten years ago a $500 million equity investment was huge, but today it's a medium-sized deal," X.D. Yang, co-head of Carlyle's Asia buyouts, told Reuters.
"The companies are getting bigger, the economies are getting bigger and the private equity funds and deals are getting bigger," he added.
Yang also dismissed the risk China's economy poses saying:
"Look at the new economy in China, and you see the scale of companies like Alibaba. That's a sector where you could see someone make a $500 million investment at the right time, and maybe achieve a $5 billion profit."
