Asia Pacific niche real estate assets to keep an eye on in 2022

Pharma, biotech, e-commerce, retirement living, and more to yield more return on investment

Niche sectors will offer a way to eke out higher returns in the short term, including those involved in biotech. BudimirJevtic/Shutterstock

In 2022, industry experts predict greater investment uptake in varied niche sectors in Asia Pacific, with investors swaying from the usual favourites—office and retail—that presently constitute 66 percent of investment portfolios in the region, reported AsianInvestor. 

Chief Investment Officer and Head of Fund Management for APAC at Nuveen Real Estate Louise Kavanagh listed multifamily, life science, data centres, and logistics as sectors that would stay in demand due to its tailwind and income stability.  

In South Korea, the logistics segment is still undersupplied and most of its population revolves around Seoul, with both overseas and local occupiers hoping to permeate the market. 

“Niche sectors will offer a way to eke out higher returns in the short term, [including] those involved in telecommunications, pharma, biotech, new energy, data, e-commerce. [Same goes for sectors] focusing on demographic shifts like the need for retirement living and care homes in markets like Japan and Australia, where there are large [ageing] populations with discretionary spending capacities,” added Kavanagh.  

In the next few years, Simon Wallace, co-head of real estate research at DWS, anticipates a robust recovery for Australia, noting its fast-growing cities and “larger-than-average price correction” in Melbourne and Sydney. 

More: Industrial and logistics investments across Asia Pacific to flourish in 2022

“Elsewhere in the region, we see the potential for outperformance in fast-growing cities like Fukuoka, regional logistics markets such as Busan, and emerging locations like Pangyo in Seoul and North Sydney,” shared Wallace. 

The real estate market across the region is currently on a period of recovery, particularly with the growing rental activity and yield compression. “We see this recovery stretching into 2022 and beyond, as a wall of capital pivoting towards the sector,” he concluded. 

The Property Report editors wrote this article. For more information, email: [email protected].