AEW Capital Management - Mon, 10/07/2024 - 22:03

Asia Pacific Market Perspective - Q2 2024

H2 2024: Turning Tide or Treading Water?

TAKING STOCK OF FIRST HALF 2024 AND EXPECTATIONS FOR SECOND HALF

Bank of Canada (BoC) started cutting rates, while central banks in the U.S., and most of Asia Pacific held steady. For these latter economies, Q2 inflation and job data suggest a possible pivot in the months of Q3.

At the end of July and early August, the divergence in monetary policies—rate hold in the U.S., rate cut in the U.K., and rate hike in Japan—led to significant market volatility. We saw the unwinding of the popular carry trade (borrowing in Yen to invest in global risk assets), weakened dollar, and a drop in swap rates (excluding Japan), signaling lower borrowing costs and raising concerns about an economic slowdown.

In Asia Pacific, commercial property transaction volumes have improved in some markets, providing repricing evidence. In others where transaction evidence is still lacking due to a wide bid-ask spread, valuers are under pressure to avoid asset write-downs, but market-clearing prices significantly below current valuations may force adjustments.

With potential rate cuts on the horizon, buyer optimism could increase, helping to narrow bid-ask spreads. However, political uncertainties and their domestic and international implications are becoming more significant in decision-making.

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AEW Capital Management

For over 40 years, AEW Capital Management, L.P. (AEW) has provided real estate investment management services to investors worldwide. As one of the world’s largest real estate investment advisors, AEW and its affiliates manage $84.4 billion in private real estate equity, debt and listed securities across North America, Europe and Asia (as of June 30, 2024). Grounded in research and experienced in the complexities of the real estate and capital markets, AEW actively manages portfolios in both the public and private property markets and across the risk/return spectrum. AEW and its affiliates have offices in Boston, Los Angeles, Denver, London, Paris, Hong Kong, Seoul, Singapore, Sydney and Tokyo, as well as additional offices in eight European cities. For more information, please visit www.aew.com.

As of June 30, 2024. AEW includes (i) AEW Capital Management, L.P. and its subsidiaries and (ii) affiliated company AEW Europe SA and its subsidiaries. AEW Europe SA and AEW Capital Management, L.P. are commonly owned by Natixis Investment Managers and operate independently from each other. Total AEW AUM of $84.4 billion includes $38.9 billion in assets managed by AEW Europe SA and its affiliates, $4.9 billion in regulatory assets under management of AEW Capital Management, L.P., and $40.6 billion in assets for which AEW Capital Management, L.P. and its affiliates provide (i) investment management services to a fund or other vehicle that is not primarily investing in securities (e.g., real estate), (ii) non-discretionary investment advisory services (e.g., model portfolios) or (iii) fund management services that do not include providing investment advice.

Chad Nettleship
Insurance, Investor Relations
chad.nettleship@aew.com
617.261.9485

www.aew.com
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