Reap Asia’s real estate
dividend
Today, although almost half of Asia’s population lives in
cities, Asia’s urbanisation level is still below that of North
America (82%) and Europe (74%)1 . Asia’s
urbanisation
rate will only accelerate. In ASEAN alone, about 100 million people
are expected to move from the countryside to the cities between 2015
and 20302.
Asia’s urbanisation rate is on the
rise3
Rapid urbanisation will underpin demand for housing, offices, schools
and supporting infrastructure. It also presents its own set of
challenges ranging from congestion, crime and pollution. Companies
and
policymakers have the opportunity to harness technology and create
real estate that is sustainable and efficient.
Not only will technology help reduce construction costs and time,
smart buildings will also be able to enjoy energy savings and use
data to provide security, control traffic etc. Asia appears poised
to lead
the “smart city” race in integrating technology to
enhance the quality of life of its residents. Asia Pacific has
already garnered 18 spots among the top 50 smart city governments
ranking
4. Successful smart cities are expected to enjoy higher
economic growth and more jobs, amongst other benefits.
Technological disruption within industries will create new demand for
data centers, warehouses and flexible work-spaces. Ageing
demographics will also reshape communities for the elderly.
While demand for Asian real estate will be strong, the landscape will
constantly evolve. Companies that master digital disruption,
understand global trends and have a deep understanding of customer
preferences
will succeed. Investors will need expertise to identify winners and
diversify across the property spectrum. By tapping multiple asset
classes, investors are also better positioned to fully reap the
benefits
from Asia’s growing real estate dividend (refer
to the interview with our Head of Investment Solutions, Kelvin
Blacklock).
Source:
1https://www.un.org/development/desa/publications/2018-revision-of-world-urbanization-prospects.html
2South-east
Asia is getting smart with
urbanisation
3Worldbank.
2018 numbers.
4Eden Strategy Institute and
ONG&ONG Pte Ltd, July 2018. Ranking is based on 10 metrics:
Vision. Leadership, Budget, Financial Incentives, Support
Programmes, Talent-Readiness,
People-Centricity, Innovation Ecosystems, Smart Policies and
Track Record