Urbanization is one of the most powerful demand drivers of real estate around the world. Although cyclical variables are very important in understanding real estate performance, so too is urbanization, albeit as a more stable, structural factor. In most parts of Asia Pacific, urbanization proceeds with strong numbers of rural dwellers and village folk moving to larger cities seeking higher wages and a better life. These may be lower-skilled workers who provide the energy and muscle on urban construction sites and factory floors or are negotiating the traffic as they deliver parcels or meals around the city for e-commerce companies or meal-delivery services. Or, as better education systems have been rolled out nationally in the past generation in many APAC economies, they may be graduates seeking higher skilled employment. Often, new migrants to cities are in the prime household-formation cohorts. They increasingly aspire to live in modern residential properties, even if it is unaffordable at first. They generate demand for the goods and services that need to be accommodated in modern office, logistics and retail assets. In this Watch report we review some of the key urbanization trends in APAC and explain why this region’s share of the global real estate investment universe has been growing and will continue to do so.
Source : CBRE Global Investors