Core properties are not only king but are becoming more regal, as yields on other assets perceived as safe continue to slide. In a still-stuttering global economy, investors like the steady rents, the security and, in many Asian markets, the prospects for medium- and long-term appreciation of core property. But eventually, market participants predict even risk-averse institutions will start nibbling at more speculative or noncore properties as projected returns on core shrink. 

Given how Asian real estate markets have grown and matured, does it still make sense for foreign investors to require sizeable risk premiums to invest in the region? Investors have different needs in terms of returns, and different comfort levels with known and unknown risks in particular markets, so there will never be a one-size-fits-all answer. 

At the end of 1989, Japan’s bubble economy burst and its economic miracle came to an abrupt end. The Nikkei exchange fell from nearly 40,000 to around 11,000 today. Over the course of 20 years, what appeared to be “unstoppable” economic growth proved to be anything but.