SINGAPORE, 7 February 2023 – Asia’s alternative REITs are rapidly expanding, with robust growth potential in different sectors.
According to Evolution vs. Revolution: How to Fuel Asia’s Alternative REIT Sector, a joint report released by Asia Pacific Real Assets Association (APREA) and CenterSquare Investment Management, Asian alternative REITs have seen a meaningful rise over the past five years. Within the Asian REIT universe, alternative REITs accounted for 8.5% of the index before growing 114.7% to 18.2% by 2022. Singapore and Japan are leading this growth, with Singapore seeing a 144% rise in its alternative weight, now accounting for 35.7% of developed Asia’s alternaive REITs. Japan grew its share by 69%, accounting for 43.4% of the Asian alternatives’ universe in 2022.
The author of the report, Joachim Kehr, Head of Asia-Pacific and a Senior Partner at CenterSquare Investment Management, analyzed sectors that have been powering the growth of Asia’s alternative REIT universe and stressed the importance of continued growth.
“As it relates to the development of alternative REIT sectors, Asia has already begun to write its own success story. Growth has been considerable, albeit from a much smaller base. Thus, to close the gap with the U.S. and reinvigorate Asia’s weight across global indices, it is crucial for Asia to maintain its growth trajectory.”
The report considers sectors that are emerging, what characteristics can make them attractive to investors and the environment needed to foster their viability.
“Alternative real estate sectors such as self-storage, healthcare, alternative housing and hospitality appear best placed to drive the next leg of Asia’s alternative REIT revolution. They benefit from strong structural demand drivers including aging populations, rising healthcare spending and cluster effects in the case of healthcare. Self-storage and alternative housing benefit from increased leisure spending and ownership of more goods for the former, whilst high house prices and later household formation will spur demand for the latter,” said Kehr.
Beyond weighing which sectors are best positioned to fuel the continued growth in Asia’s alternative REITs landscape, the report examines characteristics and measures that can help speed up the sustainable growth of alternative REITs.
“It will be important to take into account geographic diversification to build portfolios of scale, ensure access to underlying operating platforms in order to maximize returns, secure able and experienced sponsors and educate the investment community of the benefits that alternative real estate and REITs offer them. Sound investment strategies into the right sectors across a growing region of 4.5 billion people will position Asia to be tomorrow’s growth driver within the global real estate arena,” said Kehr.
Sigrid Zialcita, Chief Executive Officer at APREA, said that the report offers optimism about the future of alternative REITs in Asia.
“Despite the pandemic and global headwinds, alternative REITs in Asia have thrived in recent years. What we are seeing is just the start of the shift towards new economy and alternative sectors. They will continue to deliver resilient growth and remain an attractive asset class for long-term investors ,” said Zialcita.
The report can be downloaded from the APREA website.
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About APREA
The Asia Pacific Real Assets Association (APREA) is the pre-eminent regional representative of the institutional real assets industry across the Asia Pacific. It is headquartered in Singapore with chapters across China, India, Japan, Hong Kong, and Australia.
APREA is comprised of the leading global institutional investors and asset managers, developers, REITs, pension, insurance and sovereign wealth funds, family office platforms, and respected service providers, both from Asia and across the globe. Collectively, our members manage more than US$20 trillion of real assets.
APREA is committed to the promotion of real estate and infrastructure, or real assets, as a preferred investment asset class across Asia Pacific and beyond.
About CenterSquare Investment Management
Founded in 1987, CenterSquare Investment Management is a global, independent, and employee-owned real asset manager focused on listed real estate, private equity real estate and private real estate debt. As a trusted fiduciary, our success is firmly rooted in aligning our interests with those of our clients, partners and employees. CenterSquare is headquartered in suburban Philadelphia, with offices in New York, Los Angeles, London and Singapore. With more than $13 billion in assets under management (December 2022), CenterSquare is proud to manage investments on behalf of some of the world’s most well-known institutional and private investors. For more information, visit www.centersquare.com.
Contact
Rodrigo Dela Pena, Jr.
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Emily Mendell
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CenterSquare Investment Management
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Jansel Murad
Dukas Linden Public Relations
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