Branching out: Growing numbers of Asian investors look to real estate to help meet future liabilities
In the past few years, more Asian institutional investors — especially pension funds — have started to include real estate in their investment portfolios for the first time. What is behind this phenomenon, and how is it changing the investment landscape of the Asia Pacific real estate market?
A key demographic change is the ongoing ageing of the Asian population, which will impact on pension funds’ ability to meet their future liabilities. “In many cases the current portfolios, which are largely focused on fixed income, will not be able to meet these future demands,” says Graeme Newell, professor of real estate investment at the University of Western Sydney in Australia. This means there is a need for real estate and other alternative assets to be included in these investors’ portfolios to both enhance returns and provide diversification benefits.
Asian pension funds traditionally have had a