Asia Property ETF

This ETF is the Asian property ETF. Asian economies are on a steep growth path which has its impact on the real estate market. In a growing economy demand and prices in real estate are surging and these 2 factors strengthen each other. 

Another thing to keep in mind is that a new building is not built in a few days or months. The total process from planning, acquisition and completion may take many years. During that period scarcity is growing and rental prices are soaring. 

Real estate developers are flying to such situations like bees on a pot of honey which may result in a building frenzy. Eventually one is always building more square meters than the market is able to absorb. The final consequence is vacancies and collapsing prices. 

Such a business cycle may repeat itself every 5 to 10 years in upcoming economies. Also in Asia we are seeing this cycle taking shape. An economic downturn may even reinforce the severity of the situation. 

Temporary price erosions are not such a big problem unless the building is still rented. Empty buildings of course are a major drawback as much of the invested capital is financed. 

I am very positive about Asian real estate but risk is always a factor. Getting in and out at the right moment is extremely important here. 

iShares Asia Property Yield UCITS ETF

This iShares Asia Property ETF is tracking the FTSE EPRA/NAREIT Asia Dividend+ index. In total you will get about 80 shares of real estate companies and REIT’s. A REIT is a Real Estate Investment Trust.

With a REIT you are investing directly in the property itself and not in a company. Looking at the country spread Hong Kong  is dominating here with a share of 38%. Australia comes in second with a 25% share and third is Japan with a weighing of 24%.

The main focus in this Asia Property ETF is the amount of dividend paid out (which is paid quarterly). This iShares ETF is a physical ETF so iShares is buying the stocks.

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