The financial centre is moving swiftly east from the US with Asian real estate offering the greatest investment potential, according to Barings.
The investment firm says emerging markets are often misunderstood as they are not widely examined by analysts.
But Chris Lees, manager of the Baring Global Select fund, says the sector, and in particular Asian real estate development companies, has the potential to generate significant returns.
“We are currently pursuing an Asian real estate theme in the fund as real estate development shares in emerging markets are attractively valued and growing fast,” he says.
“Many are misunderstood by the market as they are not widely covered by analysts, but we believe this sector provides investors with great opportunities for growth.”
Lees’ views are backed by Hong Kong-based Marc Faber, an investor who predicted the US stock market crash in 1987.
Faber says Asian real estate offers better value than property stocks because the region’s equity markets are still vulnerable.
“I'm optimistic about Asia and emerging markets, but the stock markets at the present time are still vulnerable.
“As an asset class, real estate in Asia presents tremendous opportunities as urbanisation gets under way.”
Chris Lees says fast-growing Asian property companies offer the greatest scope for earnings growth over the medium term.
He also says the recent market volatility marks a potentially more significant shift in the global financial landscape.
“The market correction suggests the financial centre of gravity has moved east,” he says.
“Asian markets used to follow Wall Street's lead, but now Wall Street follows Asia’s and, especially, China's lead.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Scott Sinclair on 020 7034 2636 or email [email protected]
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