Safe Keep­ing

Amid a weak out­look, real es­tate is one of the few as­set classes that still re­tains value, writes Sa­muel Chu

Hong Kong Tatler - - Tatler Focus -

he year 2015 marked a turn­ing point in as­set al­lo­ca­tion glob­ally, with fixed in­come mark­ing its worst losses in years, equities re­main­ing volatile with lim­ited up­side and hedge funds wiping out their two-year gains in just the first two months of 2016. The out­look isn’t look­ing par­tic­u­larly rosy ei­ther, amid po­ten­tial rate hikes, volatil­i­ties in cur­rency and a slow­down in the global econ­omy. As a re­sult, many in­vestors are now seek­ing flight to safety rather than high re­turns.

So the mil­lion-dol­lar ques­tion is: where should we put our money now? I be­lieve real es­tate is one of the few as­set classes left that is still able to re­tain value. How­ever, it isn’t sim­ply about lo­ca­tion, lo­ca­tion, lo­ca­tion. While markets with good sup­ply-and-de­mand fun­da­men­tals serve as a ba­sis for in­vest­ment strat­egy, qual­ity is what makes your prop­erty stand out from the crowd. De­spite un­cer­tain­ties in the global econ­omy and fi­nan­cial markets in the past years, many tro­phy as­sets around the world were bought by sov­er­eign wealth funds and state-owned en­ter­prises seek­ing core re­turns.

Mean­while, Lon­don, New York and Hong Kong con­tinue to set record-break­ing res­i­den­tial prices. At Phoenix, we con­tinue to see good value in well-lo­cated res­i­den­tial prop­er­ties with pre­mium de­sign. In re­cent years, we have been ac­tive in this area, from Gramercy on Caine Road to The Mor­gan on Con­duit Road. Hong Kong’s res­i­den­tial buy­ers are so­phis­ti­cated and ex­pe­ri­enced—and have dis­cern­ing eyes. Gen­uine high-qual­ity prop­er­ties should al­ways main­tain their value in a di­ver­si­fied port­fo­lio.

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