Investing in niche property markets in Asia Pacific 2023
The real estate industry has been expanding quickly in recent years, with new types of real estate assets becoming popular such as Medical Office Buildings, Senior Living communities, Data Centers, and Built-to-Rent properties. According to Keith Ong, the CEO of RealVantage, these sectors have been doing well and attracting large investments, especially Senior Living projects, co-living and built-to-rent communities in the Asia Pacific region. As owning a house is becoming more expensive due to rising interest rates, more people are choosing to rent instead, which is contributing to the growth of the rental market, and driving investments in Senior Living.
Data Centers, which are a sub-sector of industrial properties, have been in high demand worldwide due to the increasing popularity of e-commerce and rising costs. They are currently trading at a 4-5% yield, which is lower than the 6% yield of industrial properties. The demand for data centers is expected to keep growing, particularly in emerging countries like Vietnam and Thailand, where costs are lower.
Investing in niche property markets can provide opportunities for investors to benefit from potential rental and capital value appreciation. However, these sectors are relatively new in the real estate industry, and there are risks involved. Careful consideration is required before investing in these emerging sectors. Despite the potential for high returns, investors must weigh the pros and cons before making a decision.
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