Unsung opportunities in Asia Pacific’s evolving residential markets took centre stage during the final session of the Mingtiandi Singapore Forum on Tuesday.
The Yardi-sponsored event saw speakers from investment titan BlackRock, purpose-built housing provider Centurion, co-living platform Coliwoo and private equity firm Arch Capital convene for a panel discussion on how changes in society and economy are reshaping accommodation demand in the region.
Andrew Lee, who leads investment in Singapore, Southeast Asia and South Korea for BlackRock, described the living sector as a wide spectrum comprising segments as diverse as worker dormitories, co-living facilities and two types that the asset management giant is especially keen on, serviced apartments in Singapore and multi-family in Japan.
“We are able to produce very good returns on capital,” Lee said. “And also, this asset class has proven to be fairly resilient in times of crisis and also less correlated to overall GDP.”
Worker Revolution
SGX-listed Centurion began developing purpose-built worker accommodation in Singapore in 2010, when the business was fragmented, unregulated and synonymous with spartan living conditions. Chief investment officer Ho Lip Chin recalled that subsequent regulation by the government laid the foundation for improved standards, and Centurion was quick to capitalise.
Jonathan Umali of Arch Capital (2nd R) speaking at the Mingtiandi Singapore Forum
“Companies like us started to say that we can maybe take it to a higher level with professionalism of management, compliance and governance,” Ho said. “And what we actually instituted is what they call residential life, bringing elements of really taking care of the workers.”
Best known for its co-living platform, Coliwoo last year was awarded a contract by Singapore’s Ministry of Health to operate hostel-type facilities for foreign nurses working in the city-state. In the previous arrangement, the ministry would tell the new arrivals to look for their own housing, according to Coliwoo founder Kelvin Lim.
“So this is something new that we are bringing to the market, because the nurses come from different countries, so we take care of them from the airport all the way to checking into the room,” Lim said. “On top of that, we also help them to settle down quickly in the Singapore landscape by sharing with them the traditions, how to get around.”
Morning Happy Hours
Jonathan Umali, chief investment officer of Arch Capital, pointed to a little-known housing niche in the Philippines as an example of how segmented the residential market can be.
“If you’re in Manila, you go out at night, you see all these office buildings fully lighted because they’re servicing the clients, whether it’s a call centre, accounting, legal support, HR support in North America,” Umali said. “They’re using like Eastern time, New York time. And so these are 24-hour operations and you would see when you go for breakfast, the other table is having their happy hour because they just got out from the shift.”
With an army of young people serving so-called business process outsourcing in the CBD, a lack of affordable housing in the area means workers must travel several hours every day between the office and a home outside of the city.
“The opportunity is, basically BPO housing right back at the CBD for the same amount they spend on transportation,” Umali said. “They save all the time and they just share the space together with other people. So this is the interpretation of co-living in the Philippines, and we’re very interested in that one.”
A Panel in Pictures
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