Commercial actual property markets within the U.S. and China are financial ache factors to watch in a higher-for-longer fee atmosphere, mentioned Singapore’s United Overseas Bank. But the financial institution stays optimistic about one key area.
“The U.S. commercial real estate remains a hotspot, especially with the low occupancy rates that we have,” Lee Wai Fai, chief monetary officer of UOB informed CNBC’s “Street Signs Asia.”
Vacancy charges for workplace buildings climbed to a document excessive of 18.2% in late 2022.
“The other hotspots will be China, there [are] worries about the quality and whether they can manage the property uncertainty in China,” he added.
China’s property market has struggled with faltering shopper confidence as main builders like Evergrande and Country Garden stay mired in debt issues.
Lee added the world is heading right into a extra “uncertain environment” and the impression of higher-for-longer rates of interest is beginning to filter by the economic system.
The world’s central banks have hiked rates of interest aggressively over the previous 18 months or so in a bid to rein in hovering inflation, with various levels of success.
“China recovery has yet to come about. And of course, the recent geopolitical tension has added to the volatility,” he added.
That being mentioned, regardless of a bumpy macroeconomic atmosphere, Lee expects the ASEAN area to stay resilient, citing funding flows notably in new economic system areas resembling sustainability.
“But [for] our regional fundamentals, we are confident, because we still have low unemployment and robust consumption,” he mentioned, including that provide chains are additionally shifting into Southeast Asia.
Foreign direct funding flows to Southeast Asia have “increased by a factor of nine over the last two decades, with over half of these going to Singapore,” philanthropic group Hinrich Foundation famous in a February report.
UOB on Thursday posted a core internet revenue of $1.5 billion for the third quarter of economic 12 months 2023 ending Sept. 30, rising 5% from a 12 months in the past.
Source web site: www.cnbc.com