Asia family offices are most bearish on property, survey shows - Yahoo

This aerial picture shows a view of a modern building with outdoor units -air conditioners placed near windows in Greater Noida on the outskirts of New Delhi, India on Sunday May 7, 2023. Photographer - Anindito Mukherjee/Bloomberg

By David Ramli

(Bloomberg) — Asian family offices are turning more bearish on property than any other asset class, as interest rates rise and a potential recession looms, according to a Preqin survey.

Among more than 50 single and multi-family offices across the Asia-Pacific region polled by Preqin, 42% expect to cut their real estate capital allocation for the next 12 months, while 63% believe their property portfolio will perform worse over the coming year.

The negative sentiment toward real estate is noteworthy in a region where property has long been a foundation for accumulating wealth. Almost half of respondents said real estate did worse than expected over the past 12 months, the worst performer among all investment types included in the poll.

The survey didn’t ask respondents whether they intend to sell off their existing property holdings.

Meanwhile, market volatility has helped boost the prospects of active managers, with 57% of family offices expecting better hedge fund performance in the year ahead and more than half intending to increase their exposure to them, according to the survey.

Private debt is another expected winner, but Preqin said many of the investors surveyed cited challenges including a lack of expertise and limited access to good opportunities — issues that have driven some to private debt funds and platforms.

Among the respondents, 91% said that private debt either met or exceeded their expectations in the past 12 months.

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