Asian cultural shifts create investment opportunity

A demographical shift in Asia has fuelled an investment opportunity in senior living real estate in countries such as Japan, China and Korea, according to AMP Capital.  

AMP Capital found that ageing populations and strong cultural shifts had created strong demand for aged care homes and assisted living facilities.  

AMP Capital associate director, Christopher Deves, said: "Demographic trends such as declining birth rates, urbanisation and increasing workforce participation are challenging the traditional model of in home family care in Asia. Coupled with rapidly aging populations in Japan, China and Korea, this should see demand for greater investment in senior living real estate including from global investors".  

Listed real estate was connected to some of the most important long-term trends in society, he said.  

The fund manager's whitepaper, 'Investing in the grey boom: a role for senior living real estate in Asia', highlighted that if Japan, China and Korea also securitised their senior living real estate assets, as North America did, there would be powerful potential in long-term investment.  

There was an increasing pool of capital from growing domestic pension schemes in Asia, coupled with the fact that Asian investors wanted to invest in local real estate, while they also wanted liquidity.  

Such long-term structural demands would see listed real estate investment opportunities continue to grow, he said.  

Long-term structural trends had comprised the sustainability of traditional family care models in Japan, China and Korea.  

For example, in Korea, workforce participation had increased from 46 per cent in 1980 to 57 per cent in 2014, which meant there were less people to care for elderly family on a regular basis, AMP Capital said.