Baker McKenzie's Asia Pacific Real Estate practice group is one of the sponsors for APREA’s flagship event, the Asia Pacific Real Assets Leaders’ Congress held on 22-26 November 2021.
This year's annual event was held virtually with 72 speakers and 800+ attendees across Asia Pacific. The five day Congress explores key trends in alternative assets, ESG, REITs and Infrastructure Trusts, technology and capital markets that could potentially impact investment decisions of clients.
The Baker McKenzie Asia Pacific Real Estate and Data Centre practice groups hosted two fireside chats with key industry speakers.
Jeremy Ong hosted an exclusive Interview – Fireside Chat with Jeffrey Perlman, Managing Director, Head of Asia-Pacific Real Estate and Southeast Asia of Warburg Pincus on November 22, 2021 the "New Economy" and financialization of real estate. The fireside chat discussed opportunities with respect to more traditional asset classes, REITs and real estate in Asia Pacific in general. View the full session below:
Below are key highlights from the fireside chat.
New Economy
- Change in Real Estate is driven by technology. The opportunities are in the "New Economy" which are technology-focused or technology driven, such as:
- e-commerce backed up by logistics
- data centers
- growth of tech companies; need for tech campuses
- bio-tech
- Re-balancing in investments is required because traditional investments are heavy in office, retail and hospitality. Investors are increasing exposure to New Economy Real Estate
- There is also a huge opportunity for multifamily in Asia, specially China, Australia and Japan
REITs
- REIT are in the best position to diversify investments
- Democratizes ownership of real estate - investors can now invest in a variety of real estate assets
- REITs are also a good exit vehicle allowing more investments to come in
ESG
The fireside chat also tackles the role of ESG in the real estate market. Specifically, the fireside chat discussed that ESG needs to sit in the center of every business. It is factored in all of the deals. Its importance will only continue to grow.
Sebastian Busa had an exclusive interview-fireside chat with Michael Dennis, Managing Director, Head of Alternatives Strategy & Capital Markets, Asia Pacific for BlackRock on 26 November 2021. The fireside chat discussed movement of capital into Asia Pacific, opportunities for logistics because of the changes in the supply chain , data centres and sustainability. View the full session below:
Below are key highlights from the fireside chat.
Movement of capital into Asia Pacific
- There is interest outside of the region but also within Asia Pacific
- Fortress ASIA: recovery started in mid-2020 for Asia Pacific, ahead of other regions
- Supply chains are affected but this is creating opportunity for investment
- Local COVID-19 response affects recovery; investors are now studying investments at a local perspective rather than on a global and regional perspective
Logistics
- There is an explosion of opportunities for logistics because of the changes in the supply chain
- Logistics is becoming more complicated (e.g. cold storage); it is important to choose your partner
- Expectation of return has changed, expectation of growth is beyond income
Data Centres
- Structure of change is driven by needs of society
- Need for data and data transmission and storage is creating opportunities
- Digitization, decentralisation and decarbonation are changing investment opportunities. For example; digitization such as working from home, online work and online shopping lead to increased need for data centers
- Asia Pacific is a hunting ground for data center opportunities. Singapore is in its prime peak due to connectivity and more affordable power
- For management of data - you need to understand government policy by jurisdiction and market segment. This changes lead times and affects investment pieces/outcomes
Sustainability
- Existing portfolios are being transitioned to focus on ESG and sustainability
- Some best practices to help achieve net zero target:
- Organize dedicated capital to solve bigger challenges such as renewables
- Set decarbonisation targets
- Check sufficient local capability and expertise
- Solutions should be scalable
- Partner with tenants/occupiers and bring them along to the sustainability journey