LaSalle Investment Management has invested about 20% of a $3 billion property fund mainly in China and Japan. But La Salle says it is approaching these two investments as hedgehogs making love, very carefully.
La Salle calls this an Asia ‘opportunity fund could, coarsely, be interpreted as they have the shorts — distressed property — and we have the money.
David Edwards, LaSalle’s Asia director, told Reuters, ‘There will be great opportunities. But we are not in a great hurry to make investments at this point in time.’
Executive of LaSalles said China’s economy was still relatively strong compared to the rest of the world, and because Beijing had been trying until late last year to cool its robust growth, it still has many tools to stimulate growth.
Jacques Gordon, international director for LaSalle, and seen here said, ‘It can still create jobs, it can still fill office buildings and it can still generate retail sales in a way the West can not.’
However, one the other side of the same coint, the property price correction in China will come slower than in other markets.
China will spend about half of its RMB4 trillion(US$585 billion) stimulus package on affordable housing through 2010, and has also scrapped stamp duty for home buyers and sellers, lowered downpayment requirements and reduced mortgage interest rates.
LaSalle is recommending that investors take a defensive stance, constructing a portfolio by taking on core assets or buying property-related debt.
Jacques Gordon, international director for LaSalle, said, ‘The message we are sending our clients it to prepare for a very tough year, and there will be more bad news before good.’