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Our latest issue of APREA TrendWatch examines the REIT landscape, focusing on insights from the APREA-SGX Global REIT Roundtable.
Ankur Gupta of Brookfield highlighted the resilience and importance of REITs in diversified global portfolios, emphasizing their strong fundamentals and ability to adapt to changing market conditions. He shared the evolution of REITs from niche assets to mainstream sectors, their low volatility, and their challenges, including competition from private funds and regulatory constraints.
We also explored regional perspectives, with Naoki Suzuki of KJR Management and Sanjeev Dasgupta of CapitaLand Investment (India) and CapitaLand India Trust discussing favorable investment climates in Japan and India, respectively, driven by strong rental growth and strategic investments in sectors like data centers and life sciences.
The Asia Pacific faces a critical need for infrastructure development due to rapid urbanisation and economic growth, necessitating substantial investments. Over the past decade, infrastructure investments have evolved, focusing on green initiatives and technological advancements. However, despite the availability of funds, challenges such as regulatory hurdles and financing constraints persist. To address these challenges, governments and stakeholders must collaborate to streamline processes, attract investments, and prioritise sustainability in infrastructure projects. By implementing innovative financing mechanisms and regulatory reforms, the region can bridge the infrastructure gap while advancing towards a greener, more progressive future.
In the Asia Pacific region, family offices have become significant players in infrastructure and real assets, leveraging their wealth to strategically invest amidst evolving market dynamics. Despite challenging conditions, 58% of family offices in the region reported asset growth, with a notable focus on increasing investments in real estate and private debt. These trends were further highlighted in a panel discussion organized by APREA, where experts emphasized the importance of adapting to changing interest rates and building operational efficiencies in investment decision-making.
In 2024, Southeast Asia's real estate landscape, influenced by robust economic fundamentals and changing demographics, spotlights growth opportunities in the Philippines, Malaysia and Vietnam. The industrial and logistics sectors, driven by rising e-commerce demand, lead investor interest, with a surge in the wellness and healthcare space.
In the Philippines, industrial real estate gains favor, the luxury residential segment sees a surge, and the office sector anticipates improvement. Malaysia projects a robust 2024, emphasizing industrial, logistics, and data centers, with ESG considerations gaining importance. Vietnam, overcoming economic challenges, shows promise in the industrial sector and expects a tenant-led office market.
Investors eye these markets cautiously, considering interest rate differentials and managing currency fluctuations for favorable risk-adjusted returns in Southeast Asia's thriving real estate markets.
The evolving landscape of real assets in 2024 reflects a cautious optimism after a year of uncertainty in 2023. From Asia Pacific's stable cycles offering diversification to critical shifts in logistics and office spaces, the market dynamics are diverse. Investors navigate growth sectors such as new economy, senior housing, and co-living spaces, while private credit opportunities emerge in various markets. Structural shifts, including technology integration and sustainability initiatives, reshape demand trends. Amid global economic uncertainty, strategic flexibility and a focus on growth sectors define the approach for investors in the year ahead.
