The Bricks & Mortar Report
Feb 09: No ready buyers, no willing sellers
Asia Real Estate
Christopher GeeAC
(65) 6882-2345
christopher.ka.gee@jpmorgan.com
J.P. Morgan Securities Singapore Private
Limited
See page 64 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision.
FTSE EPRA NAREIT Asia Price Index
0
1000
2000
3000
Feb-04 Feb-06 Feb-08
Source: Bloomberg
Listed real estate market size in Asia-
Pac
US$ in billions
114
164
169
42
8
14
0 50 100 150 200
Australia
Japan
HK/China
Singapore
India
Others
Source: EPRA
J.P. Morgan’s Asia Pacific real estate
equities research team list is on page 64.
• The broad financials sector needs to re-set: Asian property stocks
continued their decline in January, with the FTSE EPRA Asia NAREIT
Asia index declining 8.5% M/M. Corporate balance sheet repair and recapitalization
across the financials sector (defined broadly) will most
likely be required to enable buyers of Asian real estate risk to raise the
requisite funding to acquire from sellers (both willing or forced). Only
once the re-capitalization phase is completed will the clearing process in
both the direct and property securities markets commence.
• Still at the early stages of re-capitalization in the region: The recapitalization
of the Australian REIT sector started in mid-2008 and is
still ongoing, while Singapore’s has just commenced. The distinct
segregation of the Japan real estate market into large, well-capitalized
haves and smaller have-nots may mean that re-capitalization will have to
take the form of consolidation.
• We see Hong Kong as a relatively safe haven: Recent signs of physical
property prices stabilizing in Hong Kong may prove to be premature and
illusory, but the supply overhang in that market is the most manageable
across property segments. Limited financial stress and low gearing levels
for both household and corporate sector make Hong Kong the regional
safe haven, in our view, and we raise the Hong Kong weighting in our
regional model portfolio to overweight (from underweight previously).
• Holding on to China overweight a little longer: We continue to expect
China property stocks to be supported by positive newsflow through
1Q09, benefitting from a favorable Y/Y base of comparison and
expectations of policy easing all the way to the National Peoples’
Congress in March.
• Stock trading ranges: Across the region we remain focused on the
higher-quality, larger-cap names in each market. We recognize that the
sectoral trends are still in aggregate adverse, and we suggest that
performance will be dictated by successful navigation of each market’s
re-capitalization phases as well as an appreciation of each stock’s shortterm
trading ranges. Hence we set out our analysts’ expected trading
ranges for some of the larger-cap names in this report.

Table of Contents
Investment summary: Where are the ready buyers? ............3
Valuation screens...................................................................16
Recent research .....................................................................17
Australia market summary ....................................................52
China market summary..........................................................53
Hong Kong market summary ................................................55
Japan market summary .........................................................59
Singapore market summary ..................................................61
Other Asian emerging real estate markets...........................62