In a survey conducted by the Asia Pacific Real Estate Association (APREA) in collaboration with CenterSquare Investment Management, industry leaders provide unique insights into the evolving landscape of alternative real estate in the Asia Pacific region. The results of the survey were released in a new report called The Future of Alternative Real Assets in the Asia Pacific: Investor Views & Opportunities.
The survey, encompassing diverse professionals across asset management, real estate development, and investment management in major markets across the Asia Pacific, reveals a significant shift in investor sentiment towards alternative sectors. Sectors such as data centers, logistics warehouses, healthcare facilities, hotels, and student accommodations are gaining prominence.
“Investors express a bullish outlook on alternative real estate, foreseeing higher potential returns in the next 1-3 years. The survey underscores a growing appetite for sectors like data centers, healthcare, multi-family residential, and student accommodations. Data centers, in particular, garner the highest vote share, reflecting their robust performance and the increasing demand for AI and cloud computing services in Asia,” said Joachim Kehr, Head of Asia-Pacific at CenterSquare Investment Management, who authored the report.
Japan emerged as the top choice for the most promising alternative real estate markets, followed by Australia and India. Looking toward the future, Indonesia stands out as the most favored emerging market, driven by sustained GDP growth and the emergence of a consumption-driven middle class, while Thailand also attracts interest as an emerging market for alternative real estate investors.
While acknowledging the growth potential of alternative sectors, challenges such as limited stock availability and the importance of operating platforms for optimal returns are highlighted. The findings also emphasize the need for ongoing investor education to enhance understanding and foster capital allocation in burgeoning sectors like student accommodations and senior living.
“APREA is committed to playing a pivotal role in advancing awareness and knowledge within the real estate investment community. This report not only provides a snapshot of the current investor sentiment but also serves as a compass guiding industry stakeholders in navigating the dynamic landscape of alternative real assets in the Asia Pacific,” said Sigrid Zialcita, Chief Executive Officer at APREA.
