The Hindu Business Line : Asian Public Real Estate Association to focus on India

Traditionally, global investors tend to perceive Asia as "risky" as the sector was fragmented and poorly represented with issues relating to unity and cross-border differences.

Mumbai May 2 With foreign investors zeroing in on the realty boom in India, the Asian Public Real Estate Association (APREA), a non-profit entity that represents listed real estate in the Asia-Pacific, is keen to expand base in the subcontinent to ensure safe and assured funding avenues for its members.

The association sees enormous potential for Asian real estate markets, pegging India's prospects at $75 billion, while placing Japan on top at $1,854 billion followed by Hong Kong/China and South Korea at $272 billion and $224 billion.

Expanding Association

In an exclusive interview to Business Line, Ms Jenny Jethnani, Director Business Development, APREA, who was here last week, spoke of the need to expand association network by roping in Indian companies.

Members would get greater exposure, visibility and improved access to global capital, given the profile of the organisation. They could also be part of initiatives aimed at legislative changes and steer the industry agenda. It would also give them better cross-border links and networking opportunities.

Names such as ABN AMRO, Australian Stock Exchange, Ernst & Young, Franklin Templeton Investments, PricewaterhouseCoopers, Lehman Brothers, Macquarie Bank, Morgan Stanley, Goldman Sachs Asia LL, Swiss Reinsurance Company and Peking University figure in APREA 80-odd membership directory. Members are listed companies, property trusts, banks, property securities fund managers, stockbrokers, stock exchanges and teaching institutions.

Better Information

Ms Jethnani, said she was keen on encouraging greater investment in the Asia-Pacific region by providing better information to investors, promoting benefits of the sector and ensuring appropriate representation in global indices.

Traditionally, global investors tend to perceive Asia as "risky" as the sector was fragmented and poorly represented with issues relating to unity and cross-border differences. The number of Asian Real Estate Investment Trusts (REIT), she said, had grown from 2 to 83 in the last five years.

Japan had 39 REITs, Singapore 13, Korea 9, Thailand 8 and Malaysia 6. The number was bound to cross 100 in the next two years, she said.

Securitisation Law

A REIT operation is similar to what mutual funds provide for stock investment. They have to distribute their earnings, which become taxable at the investors' end. The trusts can be publicly or privately held. Those in public are listed. APREA, she said, believed that allocations to real estate, in retail, were increasing and aging populations require income, capital preservation and liquidity.

This apart, APREA is into a range of issues relating to governance and regulation on behalf of its members. It is assisting the Philippines Stock Exchange to develop a REIT law for implementation in 2007-08.

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