Asian real estate offers better value than property Hong Kong stocks because the region's equity markets are still "vulnerable," said Marc Faber, an investor who predicted the U.S. stock market crash in 1987.

"I'm optimistic about Asia and emerging markets, but the stock markets at the present time are still vulnerable," said Faber, who oversees $300 million in assets at Hong Kong-based Marc Faber. "As an asset class, real estate in Asia presents tremendous opportunities" as "urbanization gets under way."

The Morgan Stanley Capital International Asia Pacific Index tumbled 3.5 percent the week ended March 2, the most since July, sparked by the biggest plunge in Chinese stocks in a decade.

Asia's economic expansion is expected to drive demand for real estate, attracting interest from investors drawn to rising rents, Faber said in an interview. East Asian economies, including China and India, are expected to expand 4.4 percent this year, compared with 2.7 percent in the United States and 2 percent in Europe, according to the Asian Development Bank.

Rental rates for office space in Singapore's central business district rose to $644 a square meter, or $60 a square foot, at the end of 2006, still lower than the $692 that landlords were getting in 1996 before the Asian financial crisis, according to Leslie Chua, head of research at Jones Lang LaSalle in Singapore.