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The region’s markets opened 2022 in negative territory due to expectations of rising inflationary pressures, a potential reversal of quantitative easing, and higher interest rates. In its first meeting of the year, the Fed indicated that a rise in its benchmark rate will soon be appropriate with inflation running well above target and the labor market approaching maximum employment. This means the initial quarter-point rate-hike of the cycle is likely to kick in at the next Fed meeting in March. Asset purchases will also be cut to US$30 billion in February and come to a halt by March. Analyst are now penciling in a more aggressive tightening cycle of at least a 25-bps hike at each of the Fed’s meetings for the rest of the year. REITs bore the brunt of the negativity to underperform both bonds and equities in January.

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  • Two years since the onset of the COVID-19 pandemic, there is light at the end of the tunnel for the Asia Pacific hotel sector as more markets across the region ease border restrictions in an attempt to reboot business and leisure travel.
  • CBRE expects improvements in visitor arrivals and room occupancy to begin to emerge in Q2 2022, with Southeast Asian leisure markets set to outperform as tourists seek out open-air environments.
  • Other key trends anticipated to emerge this year include consumers gravitating to trusted hotel brands, taking longer trips and placing a stronger emphasis on hotel ESG performance.
  • This year will also see a further improvement in hotel investment volume as newcomers and experienced investors seek greater exposure, with the weight of capital chasing Asia Pacific hotels now at an all-time high.

This report was originally published in https://apacresearch.cbre.com/en/research-and-reports/Asia-Pacific-Hotel-Market-Outlook_Trends-to-Watch-in-2022

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The enhanced principles were based on feedback from industry participants and stressed the importance of stewardship outcomes.

31 March 2022, Singapore – Stewardship Asia Centre (SAC) today released the second edition of the Singapore Stewardship Principles (SSP) for Responsible Investors, updating practices to enhance Singapore’s investment environment. The revisions were driven by a 10-member steering committee, supported by the Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX).

Singapore first introduced the principles in 2016, outlining practices related to the core behaviour and actions associated with stewardship to promote active and responsible investment.  Since then, capital markets have undergone profound developments as global concerns intensified over the impact of financial investments on the economy, society and the environment. Stakeholders emphasised that investors should become better stewards by demonstrating a genuine intent to deliver sustainable performance and long-term value to clients and beneficiaries, as well as to factor in environmental, social and governance (ESG) considerations. The steering committee took into account the global market developments in shaping the principles. An industry survey was conducted in March 2021 to garner feedback from the asset management industry on their perspective of investment stewardship. This was followed by an open consultation to obtain stakeholders’ feedback on the draft of the updated SSP in November 2021.

“We received feedback from more than 20 stakeholders. These recommendations were taken into consideration to enhance the principles in the areas of internal structures and governance, stewardship beyond listed companies, and ESG considerations. We urge the financial services and investment industry to adopt the updated SSP and make a greater commitment towards responsible investment,” said Rajeev Peshawaria, CEO of SAC.

An as industry-led initiative, compliance to the principles remains voluntary. However, under the enhanced SSP, signatories are strongly encouraged to submit evidence of their stewardship efforts annually to the secretariat of the steering committee.

Abigail Ng, Executive Director and Head of Markets Policy and Infrastructure Department of MAS, said: “MAS is supportive of SAC and the industry’s collective efforts in updating the Singapore Stewardship Principles. Effective stewardship calls for a multi-stakeholder approach by market participants including asset owners, asset managers and service providers. Responsible investment stewardship can help raise corporate governance standards, drive positive change and create sustainable long-term value for all stakeholders – not just for the individual company or investor, but also for the wider economy, environment and society. This is in line with MAS’ efforts to promote sustainable financing in our financial sector. We strongly encourage market participants to become signatories of the SSP and to co-create sustainable business value in an environment of good governance.”

“SGX supports the updated Singapore Stewardship Principles for Responsible Investors. Institutional investors, through their investment strategies, play an important role in the allocation of capital to companies. Institutional investors can shape the practices of their portfolio companies through active stewardship and their investment decisions. This is especially pertinent with the market’s increased focus on ESG considerations and outcomes. With institutional investors engaging actively with companies, I hope SGX-listed companies will be more motivated towards creating and sustaining long term value,” said Tan Boon Gin, CEO of Singapore Exchange Regulation.

Industry participants, including asset managers and asset owners, welcome and support the updated principles.

Amar Gill, Head of Investment Stewardship for APAC, BlackRock, said: “The updated SSP and its enhanced rigour reflecting international developments and local trends in stewardship and corporate governance are welcome steps towards creating a positive investment ecosystem in Singapore. Its guidance will help managers like us and companies themselves protect and advance the economic interests of long-term investors like our clients.”

Sherene Ban, CEO of Singapore and Southeast Asia of J.P. Morgan Asset Management (JPMAM), said: “Active ownership is woven into our active management heritage and we constantly evolve our sustainable investing approach to keep pace with the changing requirements of our clients and regulators. The renewed principles, including monitoring investments regularly, staying active through constructive and purposeful engagement, and taking a collaborative approach in exercising stewardship responsibilities, are in line with JPMAM’s approach to stewardship and engagement.”

Prudential Singapore’s CEO Dennis Tan said: “In the drive for sustainability, every voice matters. We are proud to be an SSP signatory as its principles are aligned with our approach to responsible investment. Through active engagement with companies in our investment portfolio, we aim to achieve our net-zero target by 2050. We look forward to working collectively to further our commitment to creating a stronger, healthier future for all.”

Manish Tibrewal, CEO of Maitri Asset Management, a multi-family office, said: “Given the complexities of managing ESG issues, regular communication and collaboration form a key part of how we engage with our portfolio companies. At Maitri, we constantly align ourselves with industry-leading standards to engage with our portfolio companies. This has enabled us to exchange knowledge and further hone our ESG expertise in a transparent manner so both investor and investee are constantly ahead of the curve when it comes to adapting to the latest ESG trends.”

For more information about the updated principles, also known as SSP 2.0, please click here.

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About Stewardship Asia Centre (SAC) 

SAC is a non-profit organisation established by Temasek, dedicated to helping business and government leaders, investors and individuals activate stewardship practices through research, executive education and engagement. We define stewardship as creating value by integrating the needs of stakeholders, society, future generations and the environment.

Steering Committee of SSP 2.0:

Members

Stewardship Asia Centre (Chair and Secretariat)

Association of Chartered Certified Accountants

Asia Pacific Real Assets Association Ltd.

CFA Society Singapore

CPA Australia

Investment Management Association of Singapore

Institute of Singapore Chartered Accountants                

Securities Investors Association (Singapore)

Singapore Institute of Directors

Singapore Venture Capital and Private Equity Association

Supported by

Monetary Authority of Singapore

Singapore Exchange

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  • Mainland China’s pursuit of zero-covid continues to result in sudden and intermittent disruption to manufacturing, logistics and supply chain operations.
  • CBRE expects this environment to drive the further strengthening of just-in-case strategies as occupiers look to build up inventory to mitigate potential disruption – a trend that will generate substantial new demand for industrial and logistics real estate on the mainland.
  • As industrial and logistics occupiers look to extend their footprint to emerging hubs, tier I and satellite cities of key metropolitan areas are likely to attract stronger demand.
  • Occupiers are advised to focus on securing space in modern logistics facilities in locations with good transportation links, while investors are recommended to consider constructing greenfield developments in emerging hubs.

This report was originally published in https://apacresearch.cbre.com/en/research-and-reports/Mainland-ChinaBriefFocus-on-supply-chain-resilience-set-to-boost-industrial-and-logistics-real-estat

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REITs in 2022 appear well positioned to benefit from a sustained demand recovery, the inflation-hedging characteristics of real estate and attractive relative valuations.

Key takeaways:

  • We believe a strengthening economy should provide a healthy backdrop for many property types.
  • Real estate has historically performed well in inflationary environments despite potential interest rate increases.
  • REITs remain attractively valued compared with equities, suggesting room to grow.

Strong fundamentals supporting REITs

The global economic rebound of 2021, fueled by fiscal and monetary stimulus, economic reopenings and strong consumer spending, should provide a solid foundation for global real estate securities in 2022.

That said, supply-chain constraints and wage increases could temper growth and keep upward pressure on inflation, leading to rising interest rates. But while sharp increases in interest rates may unsettle markets in the near term, the direction of the economy and job growth tend to have a greater impact on REIT returns than rising rates.

In fact, an expanding economy typically drives stronger demand, which often leads to higher occupancy levels, giving landlords greater negotiating leverage to raise rents. Rising rents, in turn, have the potential to generate higher property cash flows, distributions and property values.

This report was originally published in https://www.cohenandsteers.com/insights/read/reits-forces-aligned-for-growth-in-2022

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The Q4 2021 Knight Frank Data Centre Report continues our growing coverage of the Asia Pacific region. Market analysis includes both established data centre hubs such as Singapore, Hong Kong, Mumbai, Sydney, Seoul, and Tokyo; and fast growth markets including Hanoi, Bangkok, Shanghai, and Kuala Lumpur – to provide the most wide-ranging view of the region.

The momentum of Q3 carried into the fourth quarter, with several major announcements across key markets in Asia Pacific. Total supply (live, phased, and under construction) in APAC increased almost 185MW in Q4, bringing total capacity in the region to over 7,900MW. Take-up was around 120MW, moderating slightly from Q3 but in line with previous quarters. For the whole of 2021, IT capacity across APAC grew by over 1,500MW.

The gigawatt markets of Tokyo and Shanghai added significant capacity in 2021, adding between 300MW to 400MW each, to their respective markets. In Q4, AirTrunk’s TOK1 facility opened in Tokyo, with its first phase up to 60MW. STT also announced its plan for two data centres in Inzai totalling 60MW. In addition, Stack Infrastructure’s has plans for a 36MW campus, and Colt has secured land for two sites in Inzai and Northern Tokyo for 45MW.

The Chinese authorities have announced the setting up of four mega clusters of data centres in the north and west of the country. This was followed by an announcement of a further 10 national data centre clusters as part of a broader strategy to transport data from eastern regions of China to western regions for storage and calculation. On the back of government plans to classify data centres as infrastructure assets for easier access to funding, India also saw several major new investments into data centre platforms, including Hiranani-Yotta and Kotak-Sify.

In Southeast Asia, Singapore lifted its hold on new data centre builds after a two-year moratorium. Under a new pilot program, up to 60MW of capacity will be made available in 2022, to developments of between 10 to 30MW each. As part of the consideration, applicants for new data centre facilities will need to commit to achieving a PUE of below 1.3 and obtain Singapore’s Green Mark for Data Centres-Platinum certification – in addition to adding strategic value for Singapore. We expect this pathfinder approach to serve as a model to other countries looking to find the right balance between their digitalization and sustainability goals.

Growing interest is also seen in emerging APAC markets like Seoul, Osaka, Ho Chi Minh, and Bangkok.

This article was originally published in https://www.knightfrank.com/

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The emergence of a fifth wave of COVID-19 in Hong Kong, together with continued strict border controls, has seen investors and corporations looking to adopt new strategies to manage the new normal in commercial real estate business operations.

In our Hong Kong Market Direction 2022 report, we highlight six factors we see impacting the future direction of the commercial real estate market in the Year of The Tiger:

  1. ESG Is Too Important to Be Ignored
  2. Bargain Hunting for Premium Office Properties
  3. Developers to Enrich Landbanks in the Northern Metropolis
  4. Automation and Warehouses are Connecting
  5. Healthy Lifestyles to Forge New Demand for Fitness Centers
  6. Growing Needs for Quality Virtual Conferencing and Collaborative Workspaces
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SS&C Intralinks’ new report, Gender Diversity and Dealmaking 2022, draws on data from more than 11,000 M&A deals announced between 2010 and 2021 and features commentary from senior dealmakers to understand this trend.

Download the new report to understand:

  • Why women CEOs outperformed men during the pandemic on post-deal share price, ROE, EBIT/sales and EBITDA/sales
  • How short-term investor reaction to deals announced by female leaders has slightly improved since our first report
  • Innovative female CEO M&A strategies and decision-making, such as managing risk by leveraging more advisors and structuring cash-only or all-stock deals
  • Significant gender-based differences in acquisition target types and deal processes
  • Why the pandemic has improved perceptions of female CEOs and diversity

This report was originally published in https://www3.intralinks.com/gender-diversity-and-dealmaking-2022

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Bolstered by increasing biotech investments and accelerating healthcare research, the biomedical sciences (BMS) industry has experienced strong growth in recent years, further reinforcing Singapore’s position as a leading biomedical science hub at the heart of Asia.

This report provides an overview of Singapore’s BMS industry and its real estate requirements with the focus on key drivers for the industry, demand, future supply and rentals of life science properties.

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Supply chains and more specifically, the disruption of supply chains have never been more in the spotlight than since the onset of the COVID-19 pandemic. Supply chain teams around the world have been called upon to rapidly adapt to volatile conditions as lockdowns swept across the globe causing scarcity of product, which has also been subsequently compounded by acute bottlenecks.

The redesign of supply chain and logistics networks in light of geopolitical, technological, demographic and urbanisation trends has been especially prevalent over recent years to optimise the combination of supplier, manufacturing, inventory, storage, and distribution flows to meet the needs of customers in the most cost-effective way.

This report, The Role of Asia Pacific in Global Supply Chains External Link, is the first in a series by Cushman & Wakefield focussing on the impacts of disruption, customer buying behaviour and the underlying megatrends on the design of supply chain and logistics networks.

This report was originally published in https://www.cushmanwakefield.com/en/insights/the-role-of-asia-pacific-in-global-supply-chains

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