Alternative Assets Are Becoming the Next Big Thing in Asian Real Estate Investing.

Investors are becoming more interested in self-storage facilities, data centers, student housing, schooling, and aged care as they seek higher returns. وظائف

 

Commercial property investors are gradually turning to alternative real estate sectors in Asia Pacific to take advantage of their competitive yields and long-term growth prospects, according to global property consultancy JLL.

 

"Asia Pacific's alternative real estate market is still relatively immature compared to Europe and the United States," says Rohit Hemnani, COO and Head of Alternatives, Capital Markets, JLL Asia Pacific. "However, interest is increasing as investors continue to search out new sectors to diversify assets and improve returns." "The way alternatives are organized creates a long-term operating lease that offers a consistent income stream while reducing market uncertainty."

 

Estimated yields on alternatives such as data centers, according to JLL, can range from 6 to 7% in Tokyo and Singapore, and 4 to 6% in Sydney. Core assets such as office buildings, on the other hand, can generate about 4.5 to 5% in Tokyo and 2.5 to 3.5 percent in Sydney, while shopping malls can generate about 4.5 to 5.5 percent in Tokyo and 2.5 to 4% in Sydney.

 

Hemnani went on to say, "REITs, equity funds, investment managers, real estate operating firms, and developers are the top global buyers of alternatives. These five groups of investors invested a total of $43 billion in the sector in 2016. We're seeing a similar pattern in Asia Pacific, with developers and private equity firms allocating more money to alternatives. REITs are particularly involved in the aged care sector in countries such as Japan."

 

The outlook for alternatives in Asia Pacific is optimistic, according to the JLL report, and will continue to gain traction as a result of large demographic shifts such as urbanization, an aging population, growing household income, and increased use of technology.

 

Education and self-storage facilities will benefit from the increase in Asia Pacific's urban population, which is expected to reach over 400 million people by 2027. Smart phones, cloud computing, and the Internet of Things will fuel an increase in data center demand, which will be boosted by an additional 560 million Internet users in the area over the next decade.

 

Meanwhile, the region's aging population is expected to grow by 146 million people over the next ten years, resulting in an increase in senior housing and nursing homes.

 

The Obstacle Ahead

 

Despite these strong demand drivers, a number of entry barriers remain. Governments typically control aged care and data centers heavily, so maintaining them in compliance with local laws can be difficult. Since the numerous alternative sectors in Asia Pacific are at different stages of maturity, understanding business fundamentals and organizational capabilities can be difficult. However, it is clear that there are substantial opportunities.

 

Hemnani clarifies, "With rapid urbanization across the country, international schools in Asia Pacific are expected to triple or quadruple in size over the next 15 years, reaching a milestone of 10 million students. This will benefit the education and student housing sectors in Australia, Mainland China, Hong Kong, India, and Southeast Asia, which are both poised for growth."

 

"Similarly, as the world's population ages, the senior housing market will thrive, especially in Japan and Mainland China, where these markets have tremendous growth potential."

 

JLL's Head of Research, Denis Ma, said, "In Hong Kong, record-high prices and ultra-low property yields are prompting a growing number of investors to investigate alternative real estate options. Student accommodation, senior housing, co-living, school, self-storage, parking, and data centers are among them. Alternative investments may also produce rental yields that are 100-2,000 basis points higher than conventional real estate properties."