KEY HIGHLIGHTS
- Living has been APAC’s most resilient real estate sector in recent years
- It was the only sector to record investment volume growth during both the COVID-19 pandemic and the global rate-hiking cycle, at 51% and 18%, respectively.
- Rental growth has also consistently outpaced both inflation and interest rates, preserving real income while maintaining a positive spread over financing costs.
- Together, these characteristics reinforce APAC living as a compelling, income-oriented allocation within a diversified real estate portfolio.
- Structural demand is no longer the differentiator, execution is
- Demographic shifts in APAC, particularly shrinking household sizes, the growth of single-person households, continued urbanisation and cross-border mobility, are increasing demand for housing and heightening affordability pressures.
- This is unfolding alongside persistent housing shortages and elevated homeownership barriers, further shifting demand towards rental solutions.
- Government policy has emerged as a key growth catalyst, boosting demand through immigration and labour mobility while creating a more supportive environment for institutional rental housing through planning and regulatory reforms.
- The combination of policy-supported population growth and persistent housing supply strengthens demand visibility, supports high occupancy and creates favourable conditions for sustainable rental growth and long-term income resilience.
- Demographic tailwinds and policy reforms underpin demand and expand the investable universe, but excess returns will increasingly depend on how investors enter, operate and scale assets.
- There is no single APAC living strategy
- While the APAC living opportunity set is expanding, it is not a homogeneous asset class. Each market-subsector follows a different institutionalisation path, offering distinct risk-return profiles and entry strategies.
- In Japan, direct acquisition of stabilised multifamily assets remains the dominant strategy given the market’s established depth and liquidity.
- Australia’s PBSA and coliving sectors feature a mix of ground-up development and conversion opportunities.
- In Singapore, entry strategy into the coliving sector largely revolves around adaptive reuse and conversion of existing assets.
- Hong Kong PBSA is likely the most conversion-led living market in APAC, driven by policy reforms.
- Korea’s living market is in an early stage of institutionalisation, creating opportunities for investors to establish operating capabilities and sourcing networks ahead of broader market development.
- Operational capability and scale are becoming core sources of alpha
- Revenue management, product positioning, active asset management and local expertise are increasingly driving performance.
- Regional platforms can enhance sourcing, standardise design and procurement, optimise pricing and operations, and create multiple capital recycling and exit pathways.
