While overall investor sentiment remains cautious, recent economic and financial conditions have allowed large investors such as pension funds and sovereign wealth funds to increase their exposure to property and, in the process, to provide much-needed equity at a time when debt finance is in short supply. Australian and Canadian pension funds, in particular, have been increasing their allocations to real estate and are about to assume a much higher profile on the international property scene.

Negative news and reports on the Chinese economy have emerged as the world’s growth engine shows signs of decelerating. People have started to question China’s growth pattern, which relies heavily on investment, and real estate investors are afraid of being caught in a bubble. Although it is prudent to be sceptical and cautious, investors should not be pessimistic. A more in-depth look at the risks associated with the Chinese economy and the property market demonstrates that much of the perceived risk is, in fact, overstated.

Nathan Dodd recently joined Mayer Brown as a partner in the Global Projects Group. He has more than 13 years' experience in project development and finance in Asia and Africa and has extensive experience with energy, natural resources and infrastructure mergers and acquisitions. Institutional Investing in Infrastructure senior editor Drew Campbell spoke with Dodd about infrastructure and infrastructure-related industries in two promising countries in Southeast Asia — Indonesia and Thailand.