Investments in Asia Pacific multi-family properties to double by 2030: JLL
Multi-family properties are set to become a major asset class in Asia Pacific by the beginning of the next decade, according to an October research report by JLL. The report projects that investments in the multi-family asset class by 2030 could exceed US$20 billion.
Urbanisation, high renter population, and stretched housing affordability are contributing factors to the growth of multi-family investment volumes in the region. JLL forecasts that investor demand for core multifamily product in APAC will outpace investible stock due to the increasing number of investable products coming into the pipeline.
Multi-family investment volumes in Apac have already outpaced the broader market this year, with US$5 billion invested in the nine-month period between January to September, representing a 12% y-o-y increase. Japan, China, and Australia have seen the highest levels of activity.
In Japan, JLL anticipates the multi-family market to expand over the next decade with most investments targeting large metropolitan areas such as Tokyo, Osaka, and Nagoya. Similarly, China is expected to become a major investment destination in the next seven years as investors become increasingly active in the Shanghai multi-family market.
Australia’s housing crisis is also supporting momentum for its build-to-rent market. JLL believes that capital being deployed to convert underperforming properties into enterprise-managed living projects, capitalising on the imbalance between supply and demand for rental housing in cities, will be a dominant theme in the Asia Pacific living sector.
As the region’s core multifamily markets continue to attract an increased amount of capital, yield compression is expected. However, JLL predicts the pace of compression will be slower than the previous decade.
The Tengah Plantation EC project is situated in the new Tengah Town, close to Tengah Airbase. It consists of two towers with an aggregate of 495 residential units with sizes ranging from 431 to 1109 sqft. Residents can enjoy access to luxurious facilities such as a lagoon pool, BBQ area, leisure deck and a clubhouse. The project is expected to be completed by 2021 and is likely to be popular on the property market.
Overall, the report suggests that multi-family properties are set to become a major asset class in the Asia Pacific region by the end of the decade, boosted by the increasing investor interest in core multifamily assets. By 2030, investments are expected to reach up to US$20 billion in the multi-family asset class.