Asia Pacific a great focal point for property, REITs — Aprea

KUALA LUMPUR: Despite the pandemic turmoil, Asia remains the locus of future global growth, expected to boast the largest economies in the world including China, Japan, India and the Asean region in 2030 and beyond.

Driven by demographic tailwinds, the Asia Pacific Real Estate Association (Aprea) believes that urbanisation in Asia Pacific is an epic boom that will drive the growth of its middle-class and with it, a cycle of rising consumption.

“As it stands, Southeast Asia’s US$2.4 trillion economy is the seventh-largest in the world and is forecasted to jump to fourth largest in Asia Pacific by 2050,” Aprea’s chief executive officer Sigrid Zialcita said.

“Its workforce will grow by a further 60 million while its urban population is expected to rise by an additional 90 million by 2030.

“The reality is that Asean needs infrastructure development if it wants to sustain its economic growth.”

Government policies in the region will continue to be conducive with significant efforts made by fast-growing countries to develop their own real estate investment trust (REIT) regimes.

Economies are in a race to secure their REIT future and significant momentum will be created as regulators strive to stay ahead of the game.

Further growth of the asset class will also be propelled by the participation of the region’s largest emerging economies. As the REIT movement accelerates in the region, the stock of institutionalised assets will continue to grow.

“Market capitalisation of the region’s REITs has risen from under US$6 billion at the dawn of the new century to over US$315 billion now,” Zialcita added.

There are significant drivers to contemplate that once China’s and India’s REIT markets are established and mature, Asia Pacific will sit as the global REIT epicenter with total market capitalisation to hit over US$1 trillion by the end of the decade, surpassing that of the US.”

By 2030, seven of the world’s 10 largest megacities will be in the Asia Pacific. The region’s urban population will expand by close to three billion.

Increasingly, the region is emerging to be an investment hotspot for cross border investors.

Additionally, the region remains a hot bed of construction activity and as its cities continue to grow, the fundamental demand for real estate and infrastructure will increase in tandem.

As economic focus increasingly turns to longerterm recovery, infrastructure investments and REITs are a crucial part of this equation, to fast track the region’s recovery from the pandemic and secure its economic future.

“The benefits of investing in institutionalised assets will be more evident as the world inches towards a postpandemic future,” Lim said.

Allocations to the region from global investors can only continue to rise and the securitization of the very assets so critical in driving its growth will be a massive investment opportunity.

“Asia Pacific remains primed to take advantage of this revolution in real assets. Aprea’s goal is to pave the way for the advancement of investment opportunities into the region’s real assets.”