The second round of quantitative easing in the United States is expected to have effects beyond the shores of the United States. Commentators writing since the announcement by the Federal Reserve to purchase US$600 billion of assets have considered what the likely effect is on the economic recovery. One of the key questions for us is: “What does that mean for investors in commercial real estate markets in Asia Pacific?”

Real estate is a not a homogenous asset class such as equities or bonds — each deal is unique. Our preference is to engage on a client-by-client and deal-by-deal basis to give advice. But if we had to have a short, sharp answer to the question, it would be: “Get invested in real estate — and stay invested.”

Here’s why — inflation.

In Asia (ex-Japan) we may see headline consumer price inflation higher than expected, leading to continuing revisions upward of inflationary expectations. There are two reasons why we may expect higher i