As the impact of the global financial crisis on the region unravels -- in the form a slumping stock market, company bankruptcies, steep falls in flat prices, and job cuts -- even the most daring of property investors have taken a step back.

It was against this backdrop that the Asian version of an international real estate summit held annually in Cannes, France, was held last week in Hong Kong.

The number of exhibitors at the MIPIM Asia conference -- developers, banks, fund managers, architectural firms, hotel groups and construction companies, mostly from Asia -- dropped to 190 from last year's 236, organisers said.

Visitors were also down to 1,700 from more than 2,100 last year.

During the three days, November 19-21, there were times when the number of people manning the exhibition booths outnumbered visitors.

Despite the lukewarm attendance, however, those who did make it to the expo shared the same enthusiasm for answering the question: Is the Asia market the last bastion of hope for property investment?

"More than ever, we do need this kind of event, our trade delegates really need to communicate in this hard moment," Gilles Chaumet, MIPIM Asia director, told AFP.

As the domestic property markets in the US and Europe are being battered by the credit crunch, many investment groups are starting to preach to their clients about the wisdom of shifting their capital to Asian properties.

"What we will probably see at some stage in early 2009 is that investment committees and fund managers will sit down to look at their asset allocations and say we want to have a certain amount in emerging markets," Glenn Maguire, chief Asia economist at Societe Generale in Hong Kong and keynote speaker at the expo, told AFP.

"I think you will see a reweighting of asset allocation within the emerging market space which is more favourable to Asia, and less favourable to Latin America and Eastern Europe," he said.

Given that a lot of wealth created over the past decade from the equity market has proved to be worthless, Maguire said, investors will find themselves increasingly attracted to the tangibility of properties.

While Eastern Europe and Latin America both have high exposure to the international banking system, Asia, which is leveraged off China, has generally kept its financial system intact with relatively low borrowing levels, he said.

The resilience of Asian economies under the sub-prime crisis appears to be supported by recent economic data.

An analysis by AME Capital showed that gains made by real estate funds with an Asian mandate dropped to 0.25 percent in 2007 from 33 percent in 2006 -- which compares favourably with European and US mandated funds, which posted respective losses of 25 and 20 percent in 2007.

Within Asia, Maguire said he expected economies which have for a long time exported to China, such as Hong Kong, Japan, Taiwan and South Korea, to outperform those which have relied on US consumption, such as Singapore, Malaysia and Thailand.

Despite the downturn, funds targeting Asia have burgeoned in recent months, said Andrew Weir, who looks after property and infrastructure at KPMG China.

Apart from continuing interest from the Middle East, he said, many sovereign funds had maintained high asset allocations to Asian properties "behind the radar screen".

"The other source of capital coming to the Asian market is what I call 'unlisted wealth' -- high net-worth individuals in Asia who haven't been really affected by the stock market situation," he said.

Weir considered it a "once-in-a-lifetime" opportunity for long-term investment into second-tier Chinese cities such as Chongqing and Wuhan as the central government had recently unveiled economic stimulus packages to boost infrastructure, speed up urbanisation and encourage domestic consumption.

"If you have the perspective that China's long-term demographics and urbanisation story is very solid, this is a historic opportunity to get sites in those cities," he said.

"Quite a lot of people think that the next six months is the right time to enter into the market."

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