Investors and developers are eyeing the living sectors, an emerging group of residential real estate products, to place their capital. The sectors encompass real estate where people live throughout their life stages: student housing, co-living, multifamily, senior living and aged care.
"We're seeing rising investor interest in the living sectors across major Asia Pacific cities because the demand for affordable, alternative housing options is intensifying," says Rohit Hemnani, COO and Head of Alternatives, Capital Markets, JLL Asia Pacific. "Investors in search of stronger yields, portfolio diversity and long-term holds should hedge their bets on these sectors now."
Top early opportunities identified for investors willing to venture out onto the risk spectrum and capitalize on healthy spreads include:
With Mumbai's student housing benefiting from more than 34 million tertiary students across the country, the demand for this space is there. India's relatively untapped and in need of capital to gain traction and is expected to command yields between 10 and 12 percent*.
Aged care and senior living spaces are more culturally accepted in Australia than elsewhere in Asia. Due to higher life expectancy and more single-person elderly households, the need for these units is likely to continue to push development demand. Sydney is a growth market with yield estimates between 6 and 8 percent*.
Co-living has gained traction in Singapore and Hong Kong and is growing rapidly in Australia. Tokyo remains relatively untapped. The city's density bodes well for co-living, and yield estimates are between 4 and 5 percent*.
Stephen Wyatt, Country Head of JLL Vietnam commented: "Vietnam is going through rapid urbanisation, with widespread smartphone usage and an ageing population. All these c characteristics are going to push for the growth of alternative real estate. Alternative real estate segment offers higher profit than traditional real estate. Not only is it the goose that lays golden eggs, this type of asset also brings long-term stability to investors."
"There is plenty of opportunity for market penetration in the living sectors now. We expect that in five years there will be a much deeper pool of assets across the various categories, and in 10 years, significant levels of trading", Rohit concluded.
* All yields are JLL estimates *
