Asia-Pacific and its rising real assets

Infrastructure investments and REITs are crucial in fast-tracking Asia-Pacific’s recovery from the pandemic 

Asia-Pacific is emerging to be an investment hotspot for cross-border investors. Wantanddo/Shutterstock

As reported by APREA, major economies are experiencing their first contractions in more than a decade after the arrival of the COVID-19 pandemic, but real assets, infrastructure investments, and REITs are calculated to help drive the region’s recovery and secure its economic future.  

The report, prepared by Sigrid Zialcita, APREA’s chief executive officer and a former speaker at ARES in Bangkok and a few PropertyGuru events in Singapore, indicates that infrastructure investment is a powerful force that governments can use to stimulate the economy. It boosts short-term demand, as well as lays the foundation for future economic growthNot only do these investments generate significant multiplier effects, but collectively, the region can become stronger via sustained infrastructure investment 

Many countries in the region have economic ambitions to power infrastructure spending and uplift themselves out of this plunge. For instance, China announced plans to develop “new infrastructure”, requiring nearly USD7 trillion for the next five to seven years. The Indian government also recently pledge to expand expenditure into its USD1.5 trillion infrastructure pipeline. In Southeast Asia, ambitious infrastructure projects are set in stone, such as President Duterte’s “Build!, Build!, Build!” plan in the Philippines 

Another drive to the infrastructure boom is the integration of the region’s economies, namely China’s Belt Road Initiative and Japan’s reformulation of its strategies to target supply-side policies to speed up and sustain economic growth.  

Moreover, the pandemic has impacted real estate, steering a new era for the industry and necessitating a reset to redefine real estate’s place in the city and the economy.  

The pandemic has caused a shift towards agile workspaces, as well as real estate that caters to the growing awareness of health and environmental issues. REITs can be the fore of the industry’s transformation, distributing most profits back to investors to accelerate changes and spurring a re-occupation of commercial real estate via their asset management expertise.  

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The adoption of REITs will maintain acceleration, with the region’s emerging markets sustaining momentum in 2021. Thailand has already four awaiting, while the Philippines revealed its first REIT at the peak of the pandemic last year and Brookfield India REIT launched in February 

REITs have potential beyond its entity of listed security in the region, but it is a catalyst for sustained urbanisation. As a funding source substitute now, REITs are emerging to be a vital tool to revitalise economies.  

Asia-Pacific is emerging to be an investment hotspot for cross-border investors, as well as a hotbed of construction activity. As the region’s real estate industry expands, infrastructure demand will rise alongside, and the advantages of investing in institutionalised assets will be more evident as the world moves towards a post-pandemic future.