The Wealth Report identifies two hotspots in the Asia-Pacific region that present exciting opportunities for private property investors in 2017 and beyond.
While investment decisions will always depend on the individual – their appetite for risk, their level of experience and expertise and the level of return they’re looking for – away from the main global gateway cities such as London, New York, Tokyo and Paris, a growing number of exciting locations is emerging, with all the ingredients needed to make them attractive long-term commercial real estate investment choices for the private investor.
In this article we highlight two cities in Asia-Pacific that are leading the way in developing a compelling mix of education, lifestyle, infrastructure, technology and real estate and, in the process, becoming the kind of vibrant, attractive locations where people want to work, shop, play and live.
While each of the cities featured here is unique, they do have certain characteristics in common. In particular, the rapid growth of technology companies is driving a wave of regeneration and development that echoes through all real estate sectors. Cities that can provide a favourable environment for this type of business are seeing significant investor interest.
A large part of the attraction for these in-moving tech firms is the prospect of becoming part of an ecosystem that has been designed to attract the best talent. Education is a critical component, ensuring a regular flow of the type of highly skilled employees so sought after by fast-growing companies in the global “war for talent”.
And hand-in-hand with this comes demand not only for office space but for housing, retail, logistics, hotels and other types of income-producing real estate.
With a population forecast to surpass Sydney’s by 2036, Melbourne is a thriving city that has undergone a significant transformation over the last decade. In particular, there is strong growth in city centre living; unsurprising, given that the Economist Intelligence Unit rates it as the “world’s most liveable city”.
In addition, the city is now the second-largest office market in Australia (behind Sydney), with the number of employees based in the central business district (CBD) increasing by more than 24% over the past 10 years.
This has led to a wave of development activity with several large mixed-use schemes already delivered and a number in the pipeline, including the 30-year renewal project at the Fisherman’s Bend precinct, which will cover 450 hectares in Port Melbourne, south-west of the CBD.
The continued emergence of these major projects provides investment opportunities of a scale and diversity to appeal to large investors, helping to maintain Melbourne’s position as a primary destination for global and domestic capital.
Touted as the IT and start-up capital of India, Bengaluru has emerged as an attractive destination for multinational enterprises looking to set up innovation centres and tap into a fresh pool of technology talent.
In-movers including Uber, Airbus and Visa now sit alongside a healthy start-up scene, with home-grown tech success stories such as Flipkart, InMobi and Mu Sigma all now part of the billion-dollar “unicorn” club.
Importantly, the city has a number of top-class global research institutes such as the Indian Institute of Science, as well as many state-owned research organisations that are turning out the innovative culture and workforce so vital to today’s growing cities.