The mainland's growing prosperity is good news for investors and builders in South Korea, Singapore and Thailand AGAINST A BACKDROP of recovering economies and low interest rates, many Asian countries are seeing a revived interest in property investment, with prices rebounding in both the commercial and residential markets. The grade-A office market was buoyed last year by growing demand for space from the finance and professional services sectors. The residential sector performance was mixed but, in general, the momentum suggested better prospects to come. Property consultant Jones Lang LaSalle seemed the most exhilarated by Asian prospects for high-yield investors. While Japan's economy is back on track, China continues to sustain its outstanding growth rate, and this is having a positive impact on countries such as South Korea, Singapore and Thailand. Economic expansion will continue to fuel the region's property markets this year, but investors will have to move fast before local capital returns to the market. David Edwards, Asian strategist for Jones Lang LaSalle, advised investors to broaden their geographic horizons this year, but pointed out that there were risks involved with development and repositioning in developed countries. Better deals could be found in provincial cities, where the rebound in values was less marked. The consultant said investors could expect returns in markets where local capital was less active. These included China, where there were constraints on debt markets, and Japan and South Korea, where corporate restructuring played a dominant role. China and India were challenging markets because they lacked transparency, but their size, diversity and fast growth should put them on the radar screen of opportunistic investors this year, the consultant said. Property consultant Knight Frank singled out Thailand as a hot spot for investment in anticipation of continuing price growth. The demand for office space was also growing in Bangkok, with rents rising and vacancy rates falling. Andrew Pang, executive director of international investment with Knight Frank, said the demand remained strong for residential property in central Bangkok. Other hot spots included Samui, Hua Hin, Cha-am, Pattaya and Rayong, where the demand, supply and prices were going up for condominiums and resort villas. The second half of this year would see more high-end condominiums up for sale in Bangkok, and this could put pressure on rents and sale prices, Mr Pang said. The rental yield for Bangkok condominiums was between 5.5 and 6 per cent. Mr Pang said Bangkok's grade-A office market was attracting attention, with demand increasing steadily, and even spilling over to grade-B and C properties. Meanwhile, there has been a lull in the sale of luxury resorts and villas in and around Phuket since the tsunami catastrophe. He believed some developers would consider selling their remaining properties at a discount later in the year. Singapore's residential market was expected to move along steadily as economic conditions there improved, he said. Investment yield stood at 3.5 to 4 per cent and demand came mainly from residents wishing to move into higher-end properties, he said. Price growth was expected to be less than 10 per cent this year. According to Hampden Real Estate, however, investors were shifting their focus from residential to commercial properties in anticipation of a strong increase in values, rents and yields. Market observers believed corporate expansion and high consumer spending would be on the increase, especially in Hong Kong, Shanghai, Beijing and Singapore. And with an anticipated increase in business activity, businesses were already increasing headcounts and taking advantage of historically low rents to make plans for expansion.