Real estate opportunities for an ageing population in Asia

Real estate opportunities for an ageing population in Asia

Real estate opportunities for an ageing population

The Asian Pacific region is a part of the world with a huge population base. However, this population growth may get diminished in the next few decades due to the increased aged population in most of its countries. Due to this, massive international opportunities are opening up for investments in senior-care infrastructures, technological developments, and healthcare services. Conducting careful market research on the potential of these sectors can enlighten you on your business plans in the Asia Pacific region.

Studies show that by the year 2050, the global aged population will be more than the entire global population in 1950. An increase in real estate strategies and opportunities will be driven by a dwindling workforce along with an increase in institutional allocation for seniors.

Direct and indirect real estate

Direct real estate is an investment act that involves purchasing a stake in a specific property. With regard to equity investments, direct real estate refers to acquiring ownership of a physical asset such as a commercial or residential premise or building.

Indirect real estate investments, on the other hand, are more about purchasing shares in a fund or a publicly or privately held company related to real estate.

Opportunities in direct real estate

Japan has the highest number of elders in the world. It is predicted that by the year 2030, one out of three persons in Japan will be 65 years and above.

Real estate investments are now growing in demand because of this rapid ageing circumstance in Asia Pacific. Noral Wild, the head of Australia’s JLL Health and Aged Care, stated that, “In the Asia Pacific region there is a limited number of developers who are specializing in this sector.” The statement, in itself, is a call for international investors to take a look into the real estate potentials for an ageing population in Asia.

Here are some salient features of this phenomenon:

  • The impact of investments in direct real estate can already be felt in China, Taiwan, Singapore, Malaysia, Norway, Africa and Latin America. Despite the financial crisis, entrepreneurs have contributed investments from capital sources into senior health care institutions in these countries.
  • The structural shifts in direct real estate is not yet pronounced, however the positive stir in real estate investments is being felt. Research forecast shows that annual global commercial transactional volumes could hit 1 trillion US dollars by the year 2020.
  • Price adjustments are inevitable. The combination of the demands of the growing senior population and the continuous rise in capital investments will require an increase in real estate prices in this specific sector.
  • The advancement of real estate has given entrepreneurs access to helpful market research, low barriers in business entry and capital control in other countries. The ageing population relies on the services and commodities that these businesses can provide, which makes it easier for foreign players to infiltrate the Asian real estate economy.
  • Currently, there is not enough direct real estate to satisfy the amount of capital invested for this sector. Many ventures and large sized businesses are securing their assets for the ageing population boom expected in the next few decades.

The ageing population in Asia Pacific will increase tremendously in the next few years. Businesses in real estate for the senior population are estimated to sky-rocket. Updated market research can make a huge difference in your plans to infiltrate this specialised sector of the real estate industry in this region.

This entry in knowledge was updated on August 3, 2017 by specialist.